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We report the role of tunnel oxide (TO) top nitridation (TN) in the reliability of nanoscale Flash memory and provide comprehensive understanding for the mechanism. TN was expected to potentially improve the TO quality by protecting against damages from edge encroachment and other processes. However, instead of net improvement, we found a tradeoff between endurance (charge trap) and retention (charge detrap and leakage) in the reliability of the cell array. We find that more charges are trapped in the TO with increasing nitrogen concentration, although detrapping can be decreased in a limited concentration. This suggests that the defect in the TN layer (SiON) includes a deep energy trap, thus resulting in a more strongly bound charge. Increasing nitrogen concentration also degrades charge retention from TO leakage but can be better for the same electrical oxide thickness. Evaluating a band diagram suggests that the possible improvement arises from the greater physical oxide thickness, although the barrier height for electron transmission is lower. This suggests that TO leakage is dominated by an inelastic trap-assisted tunneling mode using multiple direct tunneling through deep oxide traps. The results are indicative of the intrinsic impact of TN, regardless of bulk nitrogen or hydrogen incorporation.