from the it'll-cost-you-to-remember dept.
IC Insights has predicted that DRAM prices will continue to increase this year:
According to IC Insights, DRAM prices will continue to increase even though they have more than doubled (+111%) over the last 12 months. IC Insights predicts that by the end of the calendar year DRAM's price per bit will have jumped a record 40% (or more).
[...] Of course, the record pricing levels are great for our friends at the major foundries. Samsung, Micron, and Sk Hynix are also raking in their own record profits and enjoying healthy margins. We have both DRAM and NAND shortages occurring at the same time, which is great for the foundries, and unless a player breaks ranks to gain market share, we can expect more foot-dragging before any of the foundries increases output.
The booming mobile industry and server markets are exacerbating the issue, so you would expect that the fabs would boost DRAM output. Unfortunately, the three primary fabs (Micron bought Elpida, reducing the number of players) don't share the same vision.
IC Insights indicates that Micron will not increase production capacity, instead relying upon improvements in yields and shrinking down to smaller nodes to boost its DRAM bit output. Sk Hynix has expressed its desire to boost DRAM output but hasn't set a firm timeline for fab expansion (unlikely to occur in the near term). Samsung is as tight-lipped as usual, so we aren't sure of its intentions.
In the 1980s there were 23 major DRAM suppliers, but cutthroat pricing and continual oversupplies eventually led to the wave of consolidation that left us with the current three suppliers.
December 2015: DDR4 Memory Prices Declined 40% in 6 Months
Both DDR4 and DDR3 memory prices are in steep decline, due to industry oversupply following process shrinks and a drop in demand for PCs and tablets:
Just a year ago DDR4 dynamic random access memory (DRAM) was rather expensive and was sold at a noticeable premium compared to DDR3. Today, DDR4 memory modules cost less than DDR3 modules cost a year ago and continue to get more affordable. Next year prices of DDR4 are expected to decline further as manufacturers of DRAM are gradually increasing production of memory in general and DDR4 in particular.
The average spot price of one 4Gb DDR4 memory chip rated to run at 2133MHz was $2.221 at press time, according to DRAMeXchange, one of the world's top DRAM and NAND market trackers based in Taipei, Taiwan. Spot price of a similar memory integrated circuit (IC) was $2.719 in late September and $3.618 in late June, 2015. As it turns out, the price of a single 4Gb DDR4 DRAM IC dropped 38.62% in about half of a year.
Spot prices of DDR3 memory are also declining. One 4Gb DDR3 chip rated to operate at 1600MHz cost $1.878 in Taiwan at press time. A similar chip was priced at $2.658 in late June, which means that the spot price of a 4Gb DDR3 IC dropped 29.4% in less than six months.
The difference between a 4Gb DDR3 memory chip and a 4Gb DDR4 DRAM IC used to be approximately 26.5% in June. Today, a 4Gb DDR4 chip costs about 18.5% more than a 4Gb DDR3 memory IC. Spot prices of DRAM chips directly affect prices of actual memory modules. At present one 4GB DDR4 SO-DIMM costs $18 in Taiwan, according to DRAMeXchange. A DDR3 4GB SO-DIMM is priced at $16.75. For many PC configurations, price difference between DDR3 and DDR4 memory modules is already negligible. Next year it will erode further and the new type of memory will replace DDR3 as the mainstream DRAM for personal computers and servers.
Based on current projections for sales and NAND/DRAM pricing, Samsung's semiconductor revenues are likely to grow larger than Intel's during the second quarter of 2017. Intel has held the #1 spot in the industry since 1993:
Samsung's positioning is strengthening not just because of increased demand for RAM and flash memory, but because an ongoing NAND shortage is keeping prices high. Analysts blame a rocky transition from 2D to 3D NAND, increased demand from Chinese smartphone manufacturers, and the increasing popularity of SSDs as factors in the shortage.
On top of the RAM business, Samsung also says it's seeing solid demand for 14nm SoCs, image sensors, and other smartphone chips. The company expects its new 10nm process to keep the business growing. Samsung manufactures its own Exynos SoCs as well as some of Qualcomm's Snapdragon chips and some of the A-series chips Apple uses across its iPhone, iPad, iPod, and Apple TV lineups.
Micron has temporarily suspended operation of a DRAM production facility, leading to predictions of shortages and rising prices:
TrendForce reports that Micron suspended the operation of its Fab-2 DRAM production facility on June 1 due to a malfunctioning nitrogen gas dispensing system. Micron responded that while there was an event, it didn't involve nitrogen leaking. However, Micron's admission of a problem is telling, as TrendForce predicts the event will eliminate 5.5% of the global DRAM production capacity for July. Interestingly, the market analyst firm also claims this could lead to an impact on production for Apple's new iPhone.
The 5.5% output reduction may not sound like a significant event, but in the past, similar issues have served as the catalyst for massive shortages. This could exacerbate the ongoing DRAM shortage, which has already seen DRAM prices rise appreciably.
DRAM prices are on the rise due to slow transitions to new nodes and increased demand in PC, mobile, and server segments. TrendForce predicts that the first quarter of 2017 suffered a 30% increase in the average contract pricing for DIMM modules. Making matters worse, the soothsayer predicts that we will see another 10% increase this quarter, and that is before accounting for the recent production interruption.
Also at Reuters, which reports that Micron denies the event will affect its business:
"Regarding recent rumours about Micron's fabrication facility in Taoyuan, Taiwan, Micron hereby clarifies that there was no nitrogen leaking incident nor evacuating of personnel," Micron said in a statement. "There was indeed a minor facility event but operations are recovering speedily without material impact to the business."
[...] TrendForce analysts base their reports on channel checks in the supply chain, a media officer with TrendForce told Reuters.
It's the floods all over again!
In response to increased demand, Samsung is increasing production of the densest HBM2 DRAM available:
Samsung on Tuesday announced that it is increasing production volumes of its 8 GB, 8-Hi HBM2 DRAM stacks due to growing demand. In the coming months the company's 8 GB HBM2 chips will be used for several applications, including those for consumers, professionals, AI, as well as for parallel computing. Meanwhile, AMD's Radeon Vega graphics cards for professionals and gamers will likely be the largest consumers of HBM2 in terms of volume. And while AMD is traditionally a SK Hynix customer, the timing of this announcement with AMD's launches certainly suggests that AMD is likely a Samsung customer this round as well.
Samsung's 8 GB HBM Gen 2 memory KGSDs (known good stacked die) are based on eight 8-Gb DRAM devices in an 8-Hi stack configuration. The memory components are interconnected using TSVs and feature over 5,000 TSV interconnects each. Every KGSD has a 1024-bit bus and offers up to 2 Gbps data rate per pin, thus providing up to 256 GB/s of memory bandwidth per single 8-Hi stack. The company did not disclose power consumption and heat dissipation of its HBM memory components, but we have reached out [to] Samsung for additional details.
Samsung's second generation ("1y-nm") 8 Gb DDR4 DRAM dies are being mass produced:
Samsung late on Wednesday said that it had initiated mass production of DDR4 memory chips using its second generation '10 nm-class' fabrication process. The new manufacturing technology shrinks die size of the new DRAM chips and improves their performance as well as energy efficiency. To do that, the process uses new circuit designs featuring air spacers (for the first time in DRAM industry). The new DRAM ICs (integrated circuits) can operate at 3600 Mbit/s per pin data rate (DDR4-3600) at standard DDR4 voltages and have been validated with major CPU manufacturers already.
[...] Samsung's new DDR4 chip produced using the company's 1y nm fabrication process has an 8-gigabit capacity and supports 3600 MT/s data transfer rate at 1.2 V. The new D-die DRAM runs 12.5% faster than its direct predecessor (known as Samsung C-die, rated for 3200 MT/s) and is claimed to be up to 15% more energy efficient as well. In addition, the latest 8Gb DDR4 ICs use a new in-cell data sensing system that offers a more accurate determination of the data stored in each cell and which helps to increase the level of integration (i.e., make cells smaller) and therefore shrink die size.
Samsung says that the new 8Gb DDR4 chips feature an "approximate 30% productivity gain" when compared to similar chips made using the 1x nm manufacturing tech.
UPDATE 12/21: Samsung clarified that productivity gain means increase in the number of chips per wafer. Since capacity of Samsung's C-die and D-die is the same, the increase in the number of dies equals the increase in the number of bits per wafer. Therefore, the key takeaway from the announcement is that the 1y nm technology and the new in-cell data sensing system enable Samsung to shrink die size and fit more DRAM dies on a single 300-mm wafer. Meanwhile, the overall 30% productivity gain results in lower per-die costs at the same yield and cycle time (this does not mean that the IC costs are 30% lower though) and increases DRAM bit output.
Also at Tom's Hardware.
Previously: Samsung Announces "10nm-Class" 8 Gb DRAM Chips
Related: Samsung Announces 12Gb LPDDR4 DRAM, Could Enable Smartphones With 6 GB of RAM
Samsung Announces 8 GB DRAM Package for Mobile Devices
Samsung's 10nm Chips in Mass Production, "6nm" on the Roadmap
Samsung Increases Production of 8 GB High Bandwidth Memory 2.0 Stacks
IC Insights Predicts Additional 40% Increase in DRAM Prices
The explosive growth in the NAND flash market may be slowing down:
After a blistering year-and-a-half long surge, a sudden drop in some memory prices, followed by Samsung Electronics Co's disappointing profit estimate, is causing jitters among investors who had bet the chip boom would last at least another year.
Amid news that the market has started losing some steam - prices of high-end flash memory chips, which are widely used in smartphones, dropped nearly 5 percent in the fourth quarter - some analysts now expect the industry's growth rate will fall by more than half this year to 30 percent.
That led shares in Samsung to dip 7.5 percent last week, while its home rival SK Hynix fell 6.2 percent. But analysts say that there is unlikely to be a sudden crash, and that 2018 should be a relatively stable year for chipmakers.
The $122 billion memory chip industry has enjoyed an unprecedented boom since mid-2016, expanding nearly 70 percent in 2017 alone thanks to robust growth of smartphones and cloud services that require more powerful chips that can store more data.
Previously: Samsung Set to Outpace Intel in Semiconductor Revenues
Chaos as Toshiba Tries to Sell Memory Business
IC Insights Predicts Additional 40% Increase in DRAM Prices
Expect 20-30% Cheaper NAND in Late 2018
The three DRAM suppliers are scaling back production growth as memory demand falters with no sign of recovery. The DRAMeXchange research outfit has said annual DRAM capital expenditure (CAPEX) growth has gone negative for 2019 as Samsung, SK Hynix and Micron respond to weak seasonal demand in the first quarter and beyond. DRAM prices had risen for nine consecutive quarters until the last 2018 quarter, when they fell 10 per cent compared to the third quarter.
The demand outlook for PCs, servers, smartphones, and other end-consumer products is weak and the threat of a China-US trade war is not helping things. DRAMeXchange expects first quarter DRAM prices to show a 15 per cent fall, and see 10 per cent in the next, and then 5 per cent in both the third and fourth quarters, unless something positive happens, like China and the USA becoming best buddies.
The three DRAM suppliers are locked into some production output growth this year but have scaled back their CAPEX plans and reduced growth expectations as a result of the price falls.
Related: Tsinghua to Build $30 Billion DRAM/NAND Fabrication Plant in Nanjing, China
IC Insights Predicts Additional 40% Increase in DRAM Prices
Samsung Preparing to Build Another Memory Fab Near Pyeongtaek for $27.8 Billion
U.S. Indicts Chinese DRAM Maker JHICC for Alleged Industrial Espionage