Micron and Intel Take on Asian Chip Makers with Powerful NAND Device

by Trefis Team
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Micron Technology
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Micron Technology (NASDAQ:MU) and Intel (NASDAQ:INTC) announced the world’s first 20nm, 128Gb, multilevel-cell (MLC) device. This is the first device in the industry to enable 1Tb of data storage in a fingertip-size package by using just eight die. It also provides twice the storage capacity and performance of the companies’ existing 20nm 64Gb NAND device. The 128Gb device has a transfer speed of 333MT/s, providing customers with a more cost-effective solid-state storage solution for tablets, smartphones and high-capacity solid-state drives (SSDs).

This development is yet another signal that Micron has shifted its focus from the ailing DRAM business to the more attractive NAND business. Through this, Micron is aiming for the leadership position in the NAND flash industry, where it currently has the fourth spot, behind Korean (Samsung and Hynix) and Japanese (Toshiba-Sandisk) manufacturers.

We currently have a $5.74 price estimate for Micron.

See our complete analysis of Micron here

The demand for high-capacity NAND flash devices is driven by three interconnected market trends: growth in data storage, the shift to cloud-based applications and the proliferation of portable and handheld devices.

Digital content continues to grow and users expect it to be available everywhere on the fly, synchronized via the cloud. In the cloud as well, servers require high performance, high capacity memory for faster access required in data heavy applications like video streaming. Moreover, power consumption from NAND based storage is far lesser compared to traditional disk based storage. These developments create great opportunities for high-performance, small-footprint storage, both in the mobile devices that consume the content and the storage servers that deliver it.

We forecast that consumption of NAND flash will grow exponentially from 20 billion  1Gb equivalents to over 500 billion 1Gb equivalent by the end of our forecast period.

NAND flash memory is the most valuable segment for Micron technology, accounting for around 50% of Micron’s total value. Its current NAND flash market share stands at around 13%.

Through its latest offering, Micron could very well increase its market share if the other competitors are unable to respond through a suitable offering of their own. If Micron succeeds, there could very well be a significant upside to its current $5.91 market price.

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