Market Trends of China Flash Memory Industry
NAND Flash to Hold Major Share
NAND flash memory is a storage system that stores information or data without power while exhibiting various characteristics such as low power, scalable design, high density, and cost-effectiveness, providing an effective solution for multimedia products on the market. Rising demand for low-cost storage solutions across various consumer electronics applications will be a significant factor driving market growth in the region.
The comparative advantages of NAND flash memory over its alternatives and the increasing proliferation of 5G and IOT devices are expected to drive market growth. The adoption of 5G technology in many of the same computing applications is expected to increase NAND revenue growth. According to the GSMA, China is expected to be the first market in the world to have one billion 5G connections by 2025. Such factors will drive the memory device market, including NAND Components.
The region dominates the NAND flash memory market due to the region's high technological adoption of memory devices in the consumer electronic devices and enterprise storage sectors. The region is expected to grow significantly during the forecast period due to various factors, such as the increasing proliferation of 5G, IOT devices, and data center investments.
NAND memory chips are commonly found in memory cards, USB flash drives, solid-state drives, feature phones, smartphones, and other data storage and transfer products. The growing popularity of smartphones and the increasing use of NAND flash memory in electronic devices will exacerbate market value.
In February 2022, Samsung announced that it had decided to temporarily adjust operations at its Xi'an manufacturing facilities after Chinese authorities lifted the city's pandemic lockdown. In Xi'an, Samsung employs 3,300 people and operates two fabs that produce 40% of Samsung's total NAND output. The majority of this output is destined for the Chinese market.
Furthermore, in March 2022, Apple Inc. announced that it is looking into new sources of memory chips for iPhones, including its first Chinese producer, following a disruption at a key Japanese partner that exposed the risks to its global supply. Apple is testing sample NAND flash memory chips manufactured by Hubei-based Yangtze Memory Technologies Co. Such vendor activities are expected to drive the NAND Memory device market.
YMTC is China's most significant opportunity for dominating the market for 3D NAND chips, in which memory cells are stacked vertically to increase storage density. China's top memory chip maker, YMTC, announced in April 2023 that it is making progress in producing advanced 3D NAND products using locally sourced equipment. The increased sourcing of local equipment comes after YMTC received USD 7 billion in new funding from its state-backed investors, including the 'Big Fund.'
With the rise of PCs and smartphones, NAND flash consumption is skyrocketing, much of which can be attributed to the increase in average smartphone capacity. This is expected to drive NAND flash packaging demand, influencing NAND Memory device demand. Despite a crackdown by the Indian government, Chinese smartphones continue to dominate several countries' market share and the Indian market. The market is expected to be driven by such smartphone manufacturing capacity.
Investments in Data Centers to Drive the Market
Some of the most energy-intensive data centers are server farms facilitating communication between users and web services. Most storage servers now use solid-state drives (SSDs), which use flash storage to handle high-throughput data requests at high speeds. SSDs are electronically programmable and erasable memory microchips with no moving parts. Investments in establishing and developing regional data centers are expected to generate market demand in the region.
Flash storage systems are essential for addressing future storage requirements in enterprises due to high performance, simplified infrastructure deployments, and lower energy and space requirements. Data centers use all-flash arrays and memories to enable optimal application performance in multi-cloud environments.
Many businesses are constantly investing in data center expansion, which will create market opportunities for flash memory devices used in data center applications. GLP Pte, for example, raised USD 500 million in new funds in February 2022 to help expand its data center platform in China amid rising investor demand for digital infrastructure assets. According to the company, the transaction could value China data centers between USD 4 billion and USD 5 billion. Such investments will propel the market forward.
Moreo CapitaLand announced in February 2023 that it is launching a new China-focused data center development fund and is planning two new facilities outside of Beijing. The two development projects, which will generate more than 100MW, are expected to be completed in 2025. Such vendor investments to maintain a competitive edge in the global digital infrastructure market are expected to create ample opportunities for Flash memory makers to meet the demand in data centers.
Furthermore, China Mobile announced in December 2022 that it is increasing its investments in Data Centers after gaining over 1,000 Partners. It has also worked with the Chinese Academy of Sciences' Institute of Computing Technology and Peng Cheng Laboratory in Shenzhen to build data center infrastructure. Such investments will propel the nation's data center infrastructure activities, necessitating the installation of flash memory-based devices.
The growing popularity of new use cases like real-time analytics and artificial intelligence (AI) like machine learning (ML) training or deep learning algorithms is expected to drive up demand for faster storage. The market for flash memory is expected to grow significantly as demand for fast storage increases due to increased cross-domain data use.
Moreover, increased vendor activity is expected to propel the growth of the flash memory market, which will cater to the demand for these devices in data center applications. For example, at the Flash Memory Summit (FMS) 2022 in August 2022, YMTC introduced the X3-9070 TLC 3D NAND flash, powered by the Xtacking 3.0 architecture. The X3-9070 from YMTC paved the way for the arrival of more of its 4th generation 3D NAND solutions based on Xtacking 3.0, which will provide even higher NAND throughput, and system-level performance to the company's growing customer base in data centers, enterprise-level servers, PCs, mobile devices, and other applications.
