In the past two years, the semiconductor industry has seen countless examples of cross-industry integration.

Established IDM manufacturers like Intel have outsourced some of their orders to TSMC on one hand, and on the other, they have started the wafer foundry route, accepting OEM orders from other manufacturers.

As for TSMC, they are not satisfied with their original wafer foundry business and have begun to venture into advanced packaging services. Their flagship CoWoS has become the star of the packaging industry in the past two years.

Moreover, non-semiconductor companies have also started to cross-industry. Mobile phone manufacturers, automotive manufacturers, ODM manufacturers... Over the years, chip manufacturing is no longer news, and not being involved in chips at all is the real news. This has led more manufacturers to think about how to survive and grow in the new round of competition.

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For the domestic storage industry, storage chips, as an indispensable part of the storage industry, are increasingly valued and have now become a popular track for many companies, especially storage module factories, to cross-industry transformation.

Why do storage module factories think of making their own chips?

There are two reasons. On the macro level, as foreign giants begin to selectively exit some markets with lower technological content and profits, such as EEPROM and small-capacity non-volatile storage chips like NOR Flash, coupled with the geopolitical influence that promotes the industry towards localization, the prospects for the domestic storage chip market are broad.

In terms of the manufacturers themselves, they provide storage modules and storage products for PCs, mobile phones, IoT devices, and various electronic products. They have customers on the left hand and upstream manufacturers on the right hand, and they have mastered the key channels, making it easier for them to make chips, especially in small-capacity DDR 3/4 DRAM, 2D NAND, and NOR Flash, EEPROM, and other categories, where the process is relatively mature and the application is more extensive, making it easier to seize opportunities.

So, which storage module factories have started their own cross-industry transformation path?

LongsysJiang Bolong can be considered a veteran storage company in China. Since its establishment in 1999, it has a history of more than twenty years. It started with the business of trading storage semiconductors and later opened a storage OEM business, gradually establishing a foothold in the storage market.

In the early years, Jiang Bolong's products were mainly consumer storage products such as flash memory cards and USB drives. With the rise of the consumer electronics and Internet of Things markets, the mobile storage and embedded storage/SSD markets grew rapidly. Rooted in this market, Jiang Bolong began to seek transformation.

In 2011, Jiang Bolong launched the FORESEE brand for B2B customers and began to invest in the development of eMMC and firmware. Subsequently, Jiang Bolong's FORESEE eMMC products gradually became suppliers for mainstream application processor manufacturers, providing bulk supply and customized services for many manufacturers of tablet computers, network playback boxes, learning machines, vehicle monitoring, etc., gradually occupying the main share of the domestic white-label market. In 2015, Jiang Bolong's FORESEE eMCP products successfully entered the supply chain system of mobile chip manufacturers such as Qualcomm and MediaTek.

In August 2017, Jiang Bolong announced the official acquisition and operation of the Lexar brand trademark under Micron Technology, marking the beginning of Jiang Bolong's transformation from a technology-based product company to a technology-based brand company. However, at this time, Jiang Bolong was still a pure storage module manufacturer, and the acquisition of Lexar was to better enter the consumer storage product market.

At that time, Jiang Bolong did not have its own factory. It adopted the form of a virtual factory, with storage particles mainly coming from several major storage factories such as Samsung, Micron, and Western Digital. The product packaging was handed over to the cooperative factory. Jiang Bolong did not control the storage particles or the factory. Its biggest advantage was to make small batch (relatively speaking) customized and differentiated products, distinguishing itself from large factories to meet the needs of different customers.

If it were only satisfied with this, then Jiang Bolong might have stopped in the crazy internal storage module market. However, after the acquisition of Lexar, Jiang Bolong was unstoppable and resolutely began to independently develop chips, starting to transform into a comprehensive storage manufacturer.

First, it was the main control chip. Jiang Bolong established a subsidiary responsible for the design and development of storage controller chips - Hui Yi Microelectronics. It has developed two controller chips, namely the eMMC5.1 controller chip WM6000 and the SD6.1 controller chip WM5000. Both chips use Samsung's 28nm process and are based on self-developed LDPC algorithms, supporting SRAM error detection.

It is understood that the eMMC controller chip WM6000 has excellent performance. Taking the 128GB capacity product as an example, its sequential read and write performance can reach more than 345MB/s and 310MB/s, and the random read and write speed can reach more than 220MB/s and 190MB/s, which has a clear advantage compared to similar products in the market. The SD memory card controller chip WM5000 supports the SD 6.1 protocol, and the read and write performance is also better than the mainstream level in the market.

Recently, Jiang Bolong said on the investor interaction platform that the company's WM6000, WM5000 series of main control chips have been completed in the well-known wafer factory. The chip verification has been put into production, and the application of self-developed main control chips will be matched with the company's existing mobile storage product line and embedded storage product line, effectively improving the performance indicators of the products and providing better services to major customers. The use of the company's main control chips on the company's related product lines is also expected to improve the company's relevant performance indicators in the long run.In the field of storage chips, Jiangbolong began to layout the business of small-capacity storage chips of SLC NAND Flash since 2019, and took the lead in launching a 512Mb SLC NAND Flash small-capacity storage chip in Mainland China in 2022. It can be widely used in the IoT market and can replace NOR Flash in terms of technology. According to Jiangbolong, this type of chip has passed the qualification certification of more than 20 mainstream platforms such as Qualcomm and Unisoc, and the whole process of production quality management can achieve particle-level traceability, with DPPM (the number of defective products per million) less than 100. The performance and stability have reached the level of international original factories, and the capacity has expanded from 512Mb to 8Gb.

On February 1, 2024, Jiangbolong announced that after the self-developed SLC NAND Flash series of products achieved large-scale mass production, the first self-developed 32Gb 2D MLC NAND Flash also came out recently. This product uses BGA132 packaging and supports the Toggle DDR mode, with a data access bandwidth of up to 400MB/s. It is expected to be applied to products such as eMMC and SSD, bringing more possibilities to the company's storage product portfolio.

At present, the traditional storage module manufacturer Jiangbolong has achieved its own transformation. It not only has the two brands of FORESEE and Lexar, but also has the design capability of SLC NAND Flash, MLC NAND Flash, and NOR Flash products. At the same time, it has independently developed the main control chips for eMMC and SD cards, becoming a leader among domestic storage manufacturers.

Baiwei Storage

Baiwei Storage's development experience is similar to that of Jiangbolong, both starting from storage OEM, choosing to launch their own brands at the time of the explosion of consumer electronics, and also embarking on the path of technological transformation afterwards.

The latest information shows that Baiwei Storage is a storage manufacturer integrating R&D and packaging testing. Its main products include four major sectors: embedded storage, consumer storage, industrial storage, and advanced packaging testing services, among which embedded storage is the main source of income and gross profit for Baiwei.

At the GMIF 2023 Global Memory Innovation Forum, the chairman of Baiwei Storage said that based on the company's technical accumulation in the development of storage solutions and advanced packaging testing, Baiwei Storage actively plans and implements "R&D Packaging Testing Integration 2.0", which is to layout integrated circuit (IC) design in the R&D direction, while deeply laying out the development of testing equipment and wafer-level advanced packaging testing in the packaging testing field, to better empower the needs of the industry and end customers.

In December last year, Baiwei announced that it had successfully developed and released a CXL DRAM memory expansion module supporting the CXL 2.0 specification. It stated that the Baiwei CXL 2.0 DRAM adopts the EDSFF (E3.S) shape specification, with a memory capacity of up to 96GB, and supports a PCIe 5.0×8 interface, with a theoretical bandwidth of up to 32GB/s. It can be directly connected with the backplane and server motherboard that supports the CXL specification and E3.S interface, expanding the server memory capacity and bandwidth.

In recent years, Baiwei Storage has accelerated the process of self-developed chips. In its financial report for 2023, the company mentioned that it continues to increase R&D investment in the fields of chip design, firmware development, advanced packaging testing, and chip testing equipment, and vigorously introduces outstanding talents in the industry. In addition, as of June 30, 2023, Baiwei Storage has obtained a total of 274 patents and 10 software copyrights at home and abroad, including 72 invention patents, 139 utility model patents, and 63 design patents.BaWei Storage recently stated during a research survey that the company places great emphasis on technological research and development innovation. It has recently successfully developed and released a CXLDRAM memory expansion module that supports the CXL2.0 specification. This module features support for memory capacity and bandwidth expansion, memory pooling sharing, high bandwidth, low latency, and high reliability, empowering AI high-performance computing.

In terms of IC chips, BaWei Storage indicated that the development of the first main control chip is progressing smoothly, has already been returned and lit up, and is preparing for mass production.

Founded in 2010, BaWei Storage has also launched an attack on the field of storage chip design. After its main control chip is mass-produced, it can further enhance the competitiveness of its storage modules and products.

KangYing and KangXinWei

Compared to the previous two veteran storage manufacturers, Konka Group is a newcomer. What is most well-known to everyone may be white and black home appliances. In recent years, Konka has begun to layout the semiconductor industry, and KangYing Semiconductor is a new emerging storage module company established after focusing on the storage market.

Information shows that KangYing Semiconductor, a storage module solution provider under Konka Group, is based on the development strategy of "technology + industry + park", aiming to promote business transformation and upgrading, and was founded from the current market demand. It aims to promote the production and sales of its own brand storage products. In October 2019, the predecessor of KangYing Semiconductor, Konka XinYing Semiconductor Technology (Shenzhen) Co., Ltd., was officially established.

Currently, KangYing Semiconductor, which has been established for more than 4 years, has a product line covering eMMC, eMCP, ePOP, nMCP, UFS, LPDDR, DDR, SSD, and PSSD series. The storage modules and products launched are not only suitable for PCs/notebooks but also cover a wide range of popular applications such as OTT, TV, tablets, smart speakers, mobile phones, smartwatches, smart bracelets, AR, VR, industrial control boards, equipment, car navigation, car multimedia entertainment systems, network communication terminal equipment, smart terminals, and commercial displays.

In the current situation where the storage module is severely rolled up, it is obviously not enough to be a foundry. In order to enter the field of storage chip design and ensure the research and development and production of storage products, Konka Group established a holding subsidiary, KangXinWei, as early as November 2018, even a year earlier than KangYing. KangXinWei is different from KangYing and is a semiconductor technology company whose main business is "cutting-edge storage technology development, solution output, chip design, and semiconductor device distribution."

It is understood that KangXinWei adopts a completely independent research and development and design approach, starting with consumer storage devices, carrying out the research and development and industrialization of storage controller chips, which can meet the needs of the internal electronic terminal industry for storage products and is also an important part of achieving independent and controllable development of China's storage industry. At present, KangXinWei's products focus on embedded storage devices, such as high-end eMMC, UFS, and PCIe SSD storage devices, eMMC storage controller chips, etc., and are used in fields such as televisions, set-top boxes, and mobile phones. The main business income in 2021 will reach nearly 100 million yuan.At the CES 2024 in January this year, as one of the very few domestic semiconductor memory manufacturers capable of developing and designing embedded storage controller chips, Kangxinwei showcased embedded storage chips and storage solutions with high performance, high security, high stability, and a wide temperature range, covering consumer, industrial, and automotive grades.

Kangxinwei stated that in response to the needs of different industries and products, the company has launched multiple flash memory product lines. The independently designed storage controller chips adopt the latest generation design in the industry, which can cover products with a capacity of 4 to 256GB in all aspects, and have covered fields such as mobile phones, tablet computers, automotive electronics, security, smart home, the Internet of Things, and industrial control equipment.

At CES, Kangxinwei focused on showcasing its self-developed eMMC5.1 embedded storage chip, which has characteristics such as small and refined, low power consumption, high performance, and a wide range of applications. Kangxinwei has designed its own tuning algorithm for the current mainstream 2D and 3D NAND flash, optimizing the read and write speed while also increasing the service life by 50%.

It should be noted that the main control of the module products of Kangying Semiconductor is still mainly using the "Samsung + Phison" combination. With the maturity and mass production of Kangxinwei's main control in the future, it is expected to enter Kangying's storage products and achieve domestic substitution.

Although Kangying and Kangxinwei are located in different fields, there is a clear intersection between them. As Kangxinwei's research and development gradually enters the stage, Kangying's product map and market expansion complement each other, and it is believed to be a strong force among domestic storage manufacturers.

Storage, seeking change?

For storage module manufacturers, the past year has been extremely difficult. In the down cycle, the market has fallen again and again, and the financial reports of various manufacturers are not very good. As the market reaches the bottom, there are signs of recovery. After experiencing the cold winter, module manufacturers begin to look for a way out.

It needs to be clarified that module manufacturers, located in the middle of the industrial chain, usually have a large operating scale due to the broad space of the downstream application market. However, the technical requirements for themselves are relatively low, which also leads to relatively low gross profit margins. At the same time, they need to maintain a high wafer inventory to meet customer needs and maintain cooperative relations with the original factory. The main control chip manufacturers are different. Main control chip manufacturers, as upstream Fabless integrated circuit design companies, have high chip design and R&D capabilities. Although the R&D costs are high, the gross profit margin is far higher than that of module manufacturers, and they do not need to stockpile a large amount of storage wafer inventory.

In this comparison, how can module manufacturers not think about developing storage chips? As long as they have the initiative of a main control chip, they can reduce the cost of storage module application products to the greatest extent through self-developed technology, improve their own gross profit margin, let alone the main control chip can also be sold to other module manufacturers, and increase profits again.

On the other hand, main control chip manufacturers may also be interested in entering the module market. In the future semiconductor storage market, perhaps single-business players will no longer exist, and cross-border transformation will become a new normal?