Author: Peng Cheng
Recently, frequent news has emerged from the NOR Flash market. Market research firm TrendForce released a forecast: with limited capacity expansion for NOR Flash, prices for high-capacity products are expected to rise by another 90% to 110% in the second half of the year, and prices for some models may directly double. The root cause of this round of price increases stems from the concentrated explosion of demand in the AI server and automotive electronics markets.
At almost the same time, Infineon officially announced the sale of its NOR Flash and F-RAM memory businesses to Winbond Electronics for USD 1.12 billion in cash, with both parties planning to complete the full transaction in the second half of 2027. On the domestic industry front, key progress has also been reported. Zhongtian Hongyu Integrated Circuit Co., Ltd. announced earlier this year that significant progress has been made in its second-generation high-capacity "Super Flash" chip—featuring a 28nm process and a single-chip capacity reaching the 2Gb level, it has now entered the customer sampling and testing phase.
The market landscape of NOR Flash, which has remained stable for many years, is undergoing profound changes, ushering in a revaluation of the NOR Flash industry.
01. AI Drives Demand for High-Capacity NOR Flash
Notably, in the forecast released by TrendForce, high-capacity NOR Flash products are experiencing the most significant price increases. For a long time, NOR Flash has been widely used in firmware storage scenarios due to its core characteristics of XIP (eXecute In Place) code execution and high reliability. Traditionally, NOR Flash is mainly used for small-capacity code storage in feature phones, TVs, set-top boxes, USB keys, and similar devices. In the feature phone era, the NOR+PSRAM architecture dominated for a time, where NOR Flash was used to store code and data, while PSRAM served as data cache for the MCU and DSP during computations. In traditional servers, NOR Flash primarily handles BMC firmware storage tasks; the number of chips configured on a single board per server is very limited, making the overall usage quite inconspicuous.
However, the explosion of AI has completely changed this situation. In the server field, the demand for NOR Flash in a single AI server is 3 to 5 times that of a traditional server. More importantly, AI servers are equipped with a large number of Retimer chips, and each Retimer requires an independent NOR Flash chip to load microcode. This has directly driven up the demand for high-capacity and Octal SPI NOR. Industry data shows that the number of NOR devices per server rack has increased from 3 to 5 in the past to over 30.
Another incremental growth that cannot be ignored comes from edge AI. Local inference devices such as Edge-AI, AI PCs, and robots are causing the scale of model firmware to expand several times over, driving up the demand for high-density NOR Flash. On the one hand, the popularization of secure boot mechanisms, the normalization of OTA remote upgrades for devices, and the implementation of post-quantum encryption algorithms are continuously increasing the size of firmware image files. On the other hand, the rapid deployment of edge AI devices such as AI PCs, humanoid robots, and edge inference hardware has led to a sustained increase in the demand for XIP code execution. The XIP mode requires program code to run directly on the NOR storage medium, so the expansion of firmware scale directly translates into a rigid requirement for NOR chip capacity.
The growth in usage determines the number of devices, while firmware expansion determines the capacity per device. The superposition of these two factors concentrates the incremental demand on high-capacity products above 256Mb, which is consistent with the phenomenon of price increases concentrated in the high-capacity segment. The design capacity baseline for new platforms from main controller manufacturers is shifting from 128Mb to 256Mb and 512Mb, and NOR products with a capacity of 128Mb and below are successively entering the EOL (End of Life) process.
02. High-Capacity Demand for NOR Flash Drives Technological Iteration
Over the past two decades, NAND flash memory has continued to iterate along the multi-layer stacking route, with storage capacity increasing exponentially. In contrast, NOR Flash, constrained by the physical bottlenecks of traditional floating-gate memory cells, has seen its development process significantly slow down. Mainstream NOR Flash products adopt a 2D floating-gate structure, and their single-chip capacity has stagnated for a long time since Spansion introduced a 1Gb sample in 2005.
International giants have two response paths: first, process shrinkage, advancing from 55nm and 45nm to 25nm and 20nm; second, architectural innovation, namely the 3D AND solution—increasing density by vertically stacking memory cells. Winbond Electronics' high-capacity path bets on 2D shrinkage and SpiStack stacking, with its 45nm NOR ramping up and the process shrinking to 25/20nm. However, it is no longer easy to further shrink the NOR Flash process because costs would increase significantly. Macronix proposed the R&D direction of 3D NOR Flash a few years ago and expects to launch it as early as the second half of 2026, with a product capacity of 4GB for automotive control systems.
03. Strengthening of the Monopoly Landscape by Global Giants
Against the backdrop of an obvious time lag in technological iteration, industrial mergers and acquisitions are further reshaping the global competitive landscape of NOR Flash. Industry concentration continues to rise, gradually shifting from a past situation of multiple strong players to an oligopolistic competition pattern of "one superpower and multiple strong players."
Recently, Winbond Electronics announced that it has signed a share purchase agreement with Infineon Technologies LLC, a subsidiary of Infineon, to acquire 100% equity of Infineon's NOR Flash and F-RAM businesses in an all-cash transaction. The base transaction price is USD 1.12 billion, which will be adjusted according to the relevant provisions stipulated in the share purchase agreement prior to closing. The transaction has been approved by Winbond's board of directors. According to statements from both parties, this transaction is based on a cash-free and debt-free basis, settled entirely in cash, and is expected to be completed in the second half of 2027, subject to regulatory approvals. It is reported that Winbond Electronics will revive the Spansion brand. Spansion was formed by the integration of the flash memory divisions of AMD and Fujitsu, was merged by Cypress for about USD 4 billion in 2014, and was acquired by Infineon along with Cypress for EUR 10 billion in 2020.
From Infineon's perspective, the NOR Flash business is a marginal business within the group. Constrained by the capacity ceiling of the 2D floating-gate architecture, the long-term growth potential of this business itself is limited. The recent surge in market prices is more of a short-term dividend brought by the industry cycle, rather than structural growth achieved by the business itself. Completing asset divestiture at the peak of the cycle can optimize the group's financial statements and concentrate resources on core advantageous tracks such as power semiconductors and automotive MCUs.
For Winbond Electronics, the acquisition allows it to take over Infineon's automotive-grade customer access and channel resources; obtain mature existing capacity and a complete product matrix, immediately supplementing current product supply. More importantly, the high-capacity NOR Flash market was previously dominated by Cypress and Micron. Through this acquisition, Winbond Electronics will enhance its market position in high-capacity NOR Flash. In the future, consumer-grade low- and medium-capacity NOR Flash will maintain diversified competition; however, for the high-capacity, high-reliability NOR Flash required for automotive, industrial, and AI server applications, which feature high certification barriers and long customer introduction cycles, the power of supply will further concentrate among top-tier manufacturers, profoundly affecting subsequent product pricing and capacity allocation.
04. Domestic Manufacturers Begin to Catch Up
While the new landscape of overseas giants is taking shape, the domestic NOR Flash industry is also accelerating its catch-up. Two development paths have emerged within the industry: a group of brand-new startups entering the track, and another path relying on innovations in underlying storage principles to tackle high-capacity NOR technology, which has long been monopolized by overseas companies.
First, new players are flocking in. Youcun Technology received a CNY 60 million strategic investment from Nationz Technologies in September 2026, with a pre-money valuation reaching CNY 590 million. This company chose to avoid head-on competition with overseas giants in advanced processes, focusing on the deep ecological synergy between NOR Flash and domestic MCUs. At the same time, it is proactively laying out in-memory computing chips based on the NOR storage architecture, targeting the low-power computing market for edge AI. Domestic MCU leader Zhongwei Semiconductor also launched the CMS25Q40A SPI NOR Flash chip product in January this year, with a capacity of 4M bit. The storage array is divided into 2048 programmable pages, with each page having a capacity of 256 bytes.
Relying solely on domestic substitution for low- and medium-capacity products is not enough to cope with the industrial wave of the AI era; the breakthrough in domestic high-capacity NOR technology has become an urgent demand of the industry. Domestic memory manufacturer Zhongtian Hongyu has made significant progress in the R&D of its second-generation high-capacity new flash memory chip. Relying on the original "Secondary Electron Multiplication Injection Floating Gate" technology architecture, this chip achieves a single-chip storage capacity of 2Gb and adopts a 28nm process. It is about to comprehensively advance sampling testing and mass production. This achievement marks the first substantial iteration at the capacity level in the globally compatible NOR Flash field in 21 years, breaking the long-standing capacity ceiling of traditional NOR Flash and bringing milestone progress to the autonomy of underlying technologies for domestic non-volatile memory.
The "Secondary Electron Multiplication Injection Floating Gate" adopted by Zhongtian Hongyu belongs to the innovation at the level of underlying principles. It is different from the hot electron injection mechanism of traditional NOR and is the third technical path in the world to realize charge writing in memory cells. This technology utilizes the secondary electron multiplication effect to complete floating-gate charge injection, significantly improving charge injection efficiency and weakening the negative device effects caused by process shrinkage. Under the premise of compatibility with standard NOR Flash interfaces, it adapts to the downward iteration of logic processes, solving the pain point that traditional NOR is difficult to move to advanced nodes of 28nm and below, opening up physical space for the leap in single-chip capacity.
Previously, the first-generation low-capacity products have achieved scaled shipments, with cumulative shipments exceeding 600 million units. Market validation has been completed in consumer electronics and IoT devices, proving the engineering feasibility and reliability of this original technology, and also laying a solid industrialization foundation for the implementation of the second-generation high-capacity products. This second-generation product advances the process to 28nm, with a single-chip capacity reaching 2Gb. Compared with the first-generation product, the capacity achieves a leapfrog increase of 256 times. At the same time, it is fully compatible with existing NOR Flash interfaces. Downstream customers can complete product replacement without large-scale modifications to the original hardware and software designs, reducing the migration cost of technology implementation.
Before this, NOR Flash products from mainstream global manufacturers had long stagnated at the capacity limit of 512Mb. To achieve larger capacity, multiple chips had to be connected in parallel, increasing system complexity. Once Zhongtian Hongyu's 2Gb single-chip product completes sampling testing and mass production, it will directly fill the product gap in high-capacity NOR and change the market supply landscape.
05. Conclusion
Looking back over a long period in the past, NOR Flash, constrained by the physical bottlenecks of the 2D floating-gate architecture, fell into a development deadlock of "demand dominated by low- and medium-capacity products, insufficient supply of high-capacity products, and slow technological iteration." However, the brand-new market demand brought by AI servers and automotive electronics is completely breaking the old industrial balance.
On one side, overseas giants are accelerating the layout of the new-generation 3D-AND architecture, integrating customer and capacity resources through asset mergers and acquisitions, and the degree of industry monopoly continues to strengthen. On the other side, the domestic industry is consolidating the fundamental base of domestic substitution in the low- and mid-end markets, while relying on innovations in underlying storage principles to tackle the high-capacity technological high ground.
Of course, whether it is the overseas 3D NOR solution or the domestic new-generation high-capacity Super Flash, the distance to large-scale mass production and large-scale integration into terminal products still requires crossing multiple tests such as yield optimization, reliability verification, and large-scale customer introduction. But what is certain is that the technological deadlock of NOR Flash over the past years has loosened, and a brand-new competitive cycle belonging to this firmware storage chip has officially begun.