Global Memory Suppliers Samsung Kioxia and Micron Exit Legacy NAND Production to Focus on AI causing Industrial Supply Shortages and Massive Price Hikes for Hardware Infrastructure
The foundation of the legacy hardware supply has been systematically eroded, and is being destroyed in a large paradigm shift occurring within the global memory semiconductor industry. With the largest suppliers in the market focusing their capacity on High Bandwidth Memory and new 3D NAND flash, it is becoming a rarity to find any legacy 2D NAND parts available. According to a report by Chosun, there is now an across the board re appropriation of resources, which targets a segment that brings highest profitability as opposed to general purpose components.
Samsung Electronics is now leading this transformation, having begun the phased shutdown of 2D NAND manufacturing at its Hwaseong plant. The firm will be re purposing Line 12, which previously kept up a monthly output of 80,000 100,000 wafers. The plant was Samsung's last 2D NAND facility before switching it to a production End Fab for cutting edge 1c DRAM. This end result effectively draws the curtain on legacy flash for the number one market supplier.
The cease fire on Multi Level Cell NAND production holds great significance for niche industries. Samsung has officially notified its clientele that Multi Level Cell shipment will officially cease after a last run of deliveries. Though Multi Level Cell products contain a much lower density of storage than their TLC or QLC brethren, these chips hold high regard for their extreme durability and years of operational service. These chips are used in the medical and industrial robotic industry, where a piece of equipment needs to work without malfunction for 10+ years. Though of critical importance to safety, the high maintenance cost and low profitability associated with legacy components make their production an unsustainable practice for the market's demand for AI parts.
Both Kioxia and Micron are also quick to be withdrawing from the legacy market. Kioxia had already alerted international clients that it would be incrementally exiting the market for both 2D NAND and its BiCS flash products generation 3, and would fully withdraw from market by 2029, with the wind down of already accepted orders. Micron is also in a restrictive strategy; it will only use Multi Level Cell product to satisfy prior contractual obligations. Micron has also already announced that it would also be terminating its Crucial consumer products line and will only focus on enterprise grade equipment.
The abrupt exit of the low capacity general purpose NAND has resulted in a massive supply cliff, pushing up prices in secondary markets. Data from sources shows that Multi Level Cell 64 Gb parts are currently 300+% more than they were at the end of last year, trading for prices of anywhere between $20 and $28, posing a huge financial obstacle for maintaining legacy hardware and infrastructure.
