[Kim Pyeonghwa's Peace and Chips] Persistent Pursuit by US and China... Unstable Position of Korean NAND

Samsung Electronics and SK Hynix Hold Over Half of Global NAND Market Share
US and China Actively Chase Beyond the 200-Layer Milestone
New NAND Market Competition Fueled by Corporate Efforts and Government Support

Editor's NoteSemiconductors. We hear about them every day, but when it comes to explaining the concept, it's hard to find the words. Called the "rice of modern industry," it's something you can't afford not to know. However, articles and books about semiconductors tend to be so difficult that people avoid them. But did you know that semiconductors are actually quite fascinating? Even a single semiconductor component hides the mechanisms of the entire industry and the interests between nations. Peace & Chips will spoon-feed you the hidden contexts and meanings of the somewhat uncomfortable semiconductor field. Just place your spoon on the table.

[Asia Economy Reporter Kim Pyeonghwa] Due to the memory-centric nature of the domestic semiconductor industry, we often hear about NAND flash alongside DRAM. Just as in the global DRAM market, domestic companies hold a majority share in the NAND flash market, showing dominance. However, recent statements about crises suggest that its status has declined compared to the past. Let's examine why such a phenomenon occurs in the NAND flash sector, unlike DRAM.

The Current Best: SK Hynix's '238-layer' 4D NAND... US and Chinese Companies Also Surpass 200 Layers One After Another

NAND flash, along with DRAM, represents memory semiconductors used for information storage. The difference from DRAM lies in whether it can retain information when power is off. DRAM loses stored information when power is cut, whereas NAND flash retains information, making it a non-volatile memory. Its ability to freely store and delete information makes it widely used in various devices such as smartphones and PCs. It is commonly abbreviated as NAND.

When reading NAND articles, you often encounter terms like '00-layer,' which come from the data storage method. NAND stores data in cells, and as these cells are stacked in multiple layers to increase storage capacity, each cell layer is called a "layer." In the past, storage capacity was increased by narrowing the line width in a 2D planar form, but after reaching its limit, the 2010s saw the start of stacking cells vertically (V), increasing the number of layers.

The leading player in this field is undoubtedly Samsung Electronics. Since unveiling 23-layer V-NAND in 2013, Samsung has played a major role by being the first in the world to mass-produce NAND with over 100 layers. As a result, it has maintained its market leadership through technological prowess. Another major domestic semiconductor player, SK Hynix, has also grown to become a key market player. It enhanced its competitiveness by acquiring Intel's NAND business division. Recently, it rose from the third to the second largest market player.

SK Hynix's 238-layer 4D NAND flash announced in August. It is the highest layer currently available. / Photo by SK Hynix

According to market research firm TrendForce, in the second quarter of this year, Samsung Electronics held the top spot in the NAND market with a 33.0% share, SK Hynix was second with 19.9%, and Japan's Kioxia ranked third with 15.6%. With domestic companies accounting for 52% of the market, it is clearly a strong market for the domestic semiconductor industry, but recently, other voices have been heard. This is due to the fierce pursuit by latecomers.

The US company Micron, ranked fifth in the market, has been actively competing in layer count in recent years. In July this year, it drew attention by announcing plans to mass-produce 232-layer NAND, the world's first at the time. However, the following month, SK Hynix took back the world first title by announcing the development of 238-layer 4-dimensional (4D) NAND. Moreover, news has come from China, where the technology level is relatively lower and there were no major market players, that the "magical" 200-layer barrier has been surpassed. Chinese company YMTC succeeded in developing 232-layer NAND and is expected to begin mass production within the year.

Although simply increasing the number of layers is not considered the sole indicator of technological prowess, the domestic industry, which had maintained a gap from latecomers, can no longer be complacent. The semiconductor industry explains that the difficulty level of NAND technology is relatively lower than that of DRAM, which accelerates the pursuit by latecomers. In the long term, the number of competitors may increase. The Export-Import Bank of Korea noted that the technology gap between Korea and China is five years for DRAM and two years for NAND.

Adding to concerns is the fact that overseas companies such as Micron and YMTC actively conduct business with strong government support. China is providing various supports to local companies, including YMTC, aiming for semiconductor advancement. The US has also clearly established a support policy through recent legislation such as the Chips and Science Act (CSA), attracting local corporate investments. After the announcement of this act, Micron announced an investment of $40 billion (about 57.52 trillion KRW) by 2030 and began building a memory factory locally for the first time in 20 years. It seems that this market can no longer be maintained at the top simply by companies diligently developing technology and investing.