According to foreign media sources, since the beginning of this year, the transaction price of DRAM memory, which has been rising, has fallen by nearly 10% in October alone.
This can also be seen in the data of the market research organization TrendForce: The transaction price of DRAM general products for PC (DDR4 8GB) in October was 3.71 US dollars, a month-on-month price reduction of 0.39 US dollars, a decrease of 9.51% from the previous quarter, and this drop reached The highest drop since July 2019, when the price plummeted to 11.18%. DRAM prices have been increasing since January this year, and this is the first price cut in the whole year.
According to its latest research data, the DRAM supply bit growth rate in 2022 is about 18.6%. However, as the buyer’s inventory level is already high and the demand bit growth rate in 2022 is only 17.1%, the DRAM industry will shift from short supply to demand next year. Oversupply. Although DRAM prices will decline due to oversupply, the overall output value will not fall sharply in an oligopolistic market. The total output value of DRAM is estimated to reach 91.54 billion U.S. dollars in 2022, a slight annual increase of 0.3%.
2019-2022 DRAM output value and annual growth rate (unit: million US dollars)
From the perspective of DRAM capital expenditures, in recent years, its overall capital expenditures as a percentage of revenue has gradually increased, mainly due to two main reasons:
(1) As the process of DRAM shrinking has gradually faced physical limits, after the 20nm process, except for Micron (Micron) 1α nm which still resulted in nearly 30% of the single-wafer bit growth, the others switched from 1Xnm to 1Ynm, or 1Ynm. Switching to the 1Znm process, the growth has converged to within 15%. In 2022, the most advanced manufacturing process of Samsung and SK hynix will be officially introduced to the key machine EUV. The long delivery time and high cost of this machine have caused the three major manufacturers to allocate large sums of money in advance. Capital expenditure to meet EUV’s pre-orders.
(2) Because DRAM has formed an oligopolistic market pattern, even if the average price decline cycle occasionally occurs, it is difficult for the average sales price to fall below the total production cost due to the formation of the supplier’s production order, so the original DRAM factory can gradually accumulate the revenue from this product Profitable production. Due to the difficulty in transferring the manufacturing process, in addition to the three OEMs, manufacturers such as Nanya Tech and Winbond, which have a smaller market share, have actual expansion plans. This has become another factor in the continued increase in the CAPEX to sales ratio of the DRAM market. One big reason.
In 2021, the shortage of chip production capacity will sweep the world, the semiconductor industry will usher in a structural change, and the storage industry will also face huge challenges. Faced with development opportunities and various uncertain factors, foreign storage companies such as Samsung and SK Hynix have started to move.
According to reports, due to the decline in DRAM prices, although they are optimistic about the storage market outlook, Samsung and SK Hynix are also adjusting their inventory. It is reported that Samsung and SK Hynix will start a shipment control plan to control their DRAM supply. This move will be officially launched in the fourth quarter of this year, and both companies are planning to increase foundry production capacity.
Regarding future market trends, based on the oversupply ratio in each quarter of next year as the basis for forecasting, TrendForce predicts that the average unit price of DRAM will be reduced by 15% annually, and the price decline will be more pronounced in the first half of the year. In addition, the report predicts that from the second half of next year, benefiting from the increased penetration of DDR5 and the peak season demand effect, the decline in average DRAM prices will converge, and the possibility of flat or price increases is not ruled out.
Samsung Electronics plans to further improve semiconductor cost competitiveness through 14-nanometer DRAM and 7th-generation 176-layer NAND Flash production lines in response to memory uncertainty.
Samsung Electronics recently put into mass production the industry’s smallest line width 14nm DRAM, a total of 5 layers applied EUV (extra-extra line) process, to achieve industry-leading wafer density. The number of DRAMs on a wafer has increased by about 20% compared with previous generations, which greatly reduces the cost of wafers.
SK Hynix also said: “The DRAM market is very uncertain in the short term.” It has promoted profitability-centric operations instead of competing for market share through economies of scale.