Explained: How Western Digital losing 6.5 billion gigabytes worth of NAND chips will affect consumers

Kioxia is a Tokyo-based multinational computer memory manufacturer that was spun off from the Japanese tech conglomerate Toshiba in 2019. WD uses Kloxia’s facility to manufacture some of its SSD storage devices. According to the Wall Street Journal, WD was in advanced talks to merge with Kioxia in August 2021.

WD hasn’t revealed how and where the contamination happened but Kioxia’s website speaks about production issues that affected the company’s Yokkaichi and Kitakami plants, referring to “a component containing impurities in a specific production process of the 3D flash memory ‘BiCS FLASH’”.

But according to Statista, Kioxia and WD are the second and third-largest memory manufacturers in the world commanding 18.3% and 14.7% of the market respectively, as of Q2 2021, meaning this event could have a significant impact on the global computing hardware market.

In July 2019, WD and Kloxia (Toshiba Memory Corporation at the time) had lost 6 exabytes worth of NAND storage in a similar incident when an unexpected power outage happened in the Yokkaichi region in Japan. But at the time, the NAND industry had an ongoing oversupply problem and was in a position to buffer the shutdown, according to TechSpot.

What are 3D NAND Wafers?

NAND wafers contain arrangements of a large number of memory cells, which are essentially logic gates that receive binary inputs and output a single signal. In 2D or planar flash arrays, memory cells are arranged in a simple two-dimensional matrix.

This is a well-proven approach that goes as far back as the 1980s when Toshiba originally developed flash memory. The limited space available on the die means that only a certain number of memory cells can be placed within a chip of a standard size, creating performance and capacity limitations.

There are only two ways to overcome this limitation: by either making the memory cells smaller or increasing the size of the die. Since memory cells can’t get any smaller with currently available technology, the only option left is the latter. But when the size of the 2D flash device increases, it requires longer connections between memory cells, introducing latency and affecting performance. Due to this, 2D NAND devices are limited to a capacity of 128GB currently.

But this obstacle was overcome in 2014 when Samsung researchers invented a new fabrication process where memory cells can be stacked in three-dimensional vertical layers instead of a single horizontal layer, creating 3D NAND flash storage.

This stacking process has two advantages: it multiplies the number of memory cells that a single chip can have while also reducing the distance between memory cells, leading to faster memory performance. This opened the gate for high-capacity NAND flash drives.

In June 2019, South Korean memory manufacturer SK Hynix announced the successful development and mass production of a 128-layer 1Tbit Triple Level Cell (TLC) 4D NAND FLash. (The 4D here is a marketing term, not a new technology. This flash also uses 3D architecture). Its 1Tb capacity continues to be the highest in the industry.

According to the statement on Kioxia’s website, the contamination would not be affecting the company’s production of 2D flash memory, only 3D NAND. There is a chance that this could mean only high-performance and high-capacity applications will be affected.

What effect will this have on tech consumers?

“The industry was already facing uncertainty due to the Xian lockdown at Samsung’s NAND Flash facilities, as well as ongoing semiconductor shortages, and this announcement will further complicate the outlook.  As a result, I expect this news to drive tighter near-term NAND Flash supply leading to a quicker NAND ASP rebound,” said Jeff Janukowicz, research vice president for storage and memory at International Data Corporation, to indianexpress.com.

Janukowicz believes this new development will further exacerbate the supply chain issues that are already faced by the industries with a demand for silicon components, whether it is personal device manufacturers, enterprise storage systems or cloud service providers.

This means that the effect on end-users wouldn’t necessarily be limited to users looking to source SSDs to build their own PCs. The supply crunch faced by manufacturers and cloud-service providers could also translate to increased prices for downstream customers who make use of their products/services.

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