This paper presents an empirical study that shows the relationship between innovation activities and the sustainable performance of firms in terms of market share and profit. While previous studies of innovation effects have focused on one type of innovation in the industry, such as incremental or radical innovations, the study of both incremental and architectural innovations in the same industry would enrich our understanding of innovation. This study discusses and emphasizes the importance of continuous incremental innovation and how switching-over to architectural innovation affects the sustainable performance of firms in the NAND flash memory industry. A systematic content analysis, comparing the changes in market and profit leadership in terms of continuous incremental innovation and an introduction of architectural innovation, was performed, and it was concluded that both continuous incremental innovation and switching-over to architectural innovation positively affects the sustainable market and profit leadership of firms. Additionally, architectural innovation reframes the technological lifecycle in the industry and gives a firm a chance to retain and continue its technological leadership by establishing new dominant designs. This study suggests that continuous incremental innovation is very important for high-tech firms, and firms should consider the option of switching-over to architectural innovation instead of the incremental development of current dominant design when the complexity of technology and market is increased in order to have a sustainable advantage.Sustainability 2019, 11, 7105 2 of 20 memory is used for the random access of data, it is faster than the NAND flash memory because it provides sequential access to data. However, the structure of the NAND flash is simpler than that of the NOR flash, so it is more convenient and inexpensive to increase its density. Therefore, the NAND type flash is used for the storage of data, and the NOR flash is used for the storage of codes in general [3]; eventually, the NAND flash dominated the flash industry.Since the inception of the flash memory market in the 1980s, the NOR flash memory has been the dominant design and it accounted for 91% of total flash memory revenue in 2000. However, in 2005, NAND flash revenue surpassed that of the NOR flash for the first time due to the emergence of mobile electronics such as cell phones, MP3 players, memory cards and digital cameras. Since then, the NAND flash market has grown significantly, accounting for 53.8 billion USD in sales in 2017 [5]. In 2013, Samsung was able to successfully introduce a Vertical NAND (VNAND) flash to the market in order to overcome scaling issues and tried to lead the architectural innovation by changing the dimensional design of NAND flash technology from 2D to 3D. Competitors followed the development of the VNAND flash memory and the VNAND flash market was expected to exceed the planar NAND flash market in 2017 [5]. The history and characteristics of the dominant design in the flash...