Semico: DRAM and NAND Flash: Doing the Memory Tango

Why is it critical to look at DRAM and NAND memories together?  As the target application for memory technologies continues to shift away from desktop personal computing, the value propositions of memory technologies have also changed.  In this report, we examine the strategic issues of the total memory market where manufacturing and technology decisions decide the profitability and health of participants and end use implementers.

What immediate business impact do DRAM and NAND have? DRAM and NAND manufacturing decisions affect all aspects of the semiconductor and electronics markets.  Cost per megabit and consumption by the PC market used to bound the memory market that was predominantly DRAM.  The growth of cell phones and the consumer market transformed NAND Flash into the trendsetter for costs and manufacturing technologies. The impact of this shift in the value proposition of memory technologies is magnified by the observation that approximately 60% of the 300mm fabs belong to companies with heavy investments in memory production and almost 60% of semiconductor Capex goes towards tools for memory production. “Yet memory revenue still continues to fluctuate on a quarterly basis, and the profit margins for the past several years have continued to be low, making it difficult to fund this Capex,” stated Bob Merritt, Semico VP of Memory Products. 

Who are the Players?  DRAM and NAND Flash vendors have changed the manufacturing landscape and subsequently the memory market.  NAND Flash is the technology driver for memory manufacturers that previously were dedicated DRAM manufacturers.  Major memory vendors have accomplished some economies by having fabs capable of converting from DRAM to NAND Flash and vice versa.  Flexible capacity works when these two markets are out of phase, but when the cycles align, supply-demand challenges are extraordinary.  Memory manufacturers are looking at foundry agreements to increase flexibility and reduce Capex investment.  However, orchestration and concept are not always soothing music.

The end markets previously defined the differences between DRAM and NAND functionality, with NAND Flash implemented in consumer products and DRAM in computing.  With the introduction of SSD (solid-state drives), combined with USB, computing again becomes the major consumer of both DRAM and NAND. 

Why be interested in Memory?  DRAM and NAND are the major memory market today.  The development of new memories (and the adoption in applications of those new memories) will yet again extend the importance of the memory market to equipment vendors, electronics OEMs, semiconductor designers and manufacturers, system and software designers at a minimum. 

This report provides a tutorial on the characteristics of the types of memory, reviews and anticipates the applications for DRAM and NAND, breaks out the investment required to participate in this market, discusses the key participants, and highlights the disruptive and evolutionary memories that are the future. 

When are DRAM and NAND One Driver?  Viewing this from the perspective of the total semiconductor market, the DRAM and NAND markets are just one market to the OEMs.  They are dependant upon manufacturing decisions that determine supply that equates to price.  Semico presents an analysis of DRAM and NAND and how, both independently and cooperatively, these two memory types affect the market.  The memory market is one of perception regarding the exact status of supply and demand.  This could be a wonderfully graceful tango if it didn’t keep devolving into a particularly vicious game of musical chairs.

To purchase this study, or to receive a copy of the Table of Contents, including a list of exhibits, please contact Susan Cadel at 607-368-7600 or susanc@semico.com and reference CC315-08, DRAM and NAND Flash:  Doing the Memory Tango.