Strong demand for smartphone storage, Kioxia will build a new NAND Flash production line

According to the latest news from Reuters, Kioxia said on Thursday (October 29) that it will build a new NAND memory chip production line in central Japan to meet the growing demand for data storage in smartphones, self-driving cars and other fields.

It is reported that the production line is Kioxia’s seventh production line and will be built in the existing factory in Yokkaichi, Japan. The first phase of the project will be completed in the spring of 2022.

Kioxia and its U.S. partner Western Digital are expected to jointly invest in the new production line, Kioxia said in a statement. However, the two companies did not disclose the total investment in the project.

Smartphone storage revenue increased instead of falling

The downstream market of NAND Flash mainly includes data center, consumer electronics, mobile communication, automobile, industry and other fields. As an important market segment, the prosperity of smartphones has a great impact on the revenue of storage manufacturers.

According to the latest data from TrendForce, Kioxia’s overall revenue in the second quarter was US$2.488 billion, down 3.1% quarter-on-quarter. TrendForce analyst Ye Maosheng pointed out that the pressure of declining smartphone demand eventually led to a drop of nearly 4% in Kioxia’s bit shipments.

Analysts also said that despite the overall shortage of stock in the market, the average selling price of Kioxia’s NAND Flash products still rose slightly.

Overall, in the first half of this year, the global smartphone NAND Flash market revenue increased by 5% compared with the same period in 2019. This means that although the smartphone market is declining, it can still drive the growth of the mobile phone storage market. Some analysts pointed out that this is mainly due to the increase in demand for high-capacity UFS NAND.

Memory has a trend towards larger capacity and faster reading speed. With the addition of seasonal factors, the market expects that the smartphone storage market will continue to expand.

NAND Flash pattern reorganization

The NAND Flash industry is highly concentrated, with Samsung, Kioxia, Western Digital, Micron, Intel, and SK Hynix occupying the market for a long time.

In the second quarter of 2020, the global market share of Kioxia’s NAND products was 17.2%, down from 18.9% in the first quarter. Under the current trend of strengthening integration of semiconductor giants, Kioxia’s market position will also have more significant changes.

SK Hynix and Intel jointly announced the signing of an acquisition agreement on October 20. SK Hynix will acquire Intel’s NAND flash memory and storage business for US$9 billion, as well as the Fab 68 plant in Dalian, China, which specializes in manufacturing 3D NAND Flash.

SK Hynix and Intel ranked fourth and sixth with 11.7% and 11.5% of the revenue market share in the second quarter of this year, respectively. After the acquisition is completed, SK Hynix’s market share will surpass Kioxia and become the second largest in the NAND Flash market.

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Author: Yoyokuo