Memory chips are also called semiconductor memory, and the core components are dynamic random access memory (DRAM) and NAND flash memory. According to the different storage principles, semiconductor memory is also divided into random access memory (RAM) and read only memory (ROM). Memory is the largest of the major chip categories in semiconductors and has a large share of the overall chip market.
According to IC Insights data, the last round of global memory chip revenue peaked in 2018, accounting for 33.1% of the semiconductor market, but from 2019 to 2021, due to factors such as the epidemic, global trade frictions and slowing downstream demand As a result, the growth of the global semiconductor market has slowed down, and memory revenue has fallen sharply. The global storage market size is $106.4 billion, $117.5 billion, and $153.4 billion, accounting for 26%, 27%, and 28%, respectively.
Due to the worsening macroeconomic expectations in the future, consumption will continue to be sluggish, the memory chip market will enter a downward cycle, and market conditions will become worse.
Since the first half of 2022, global memory chips have maintained growth despite reduced downstream demand. Memory chip manufacturers Micron and SK Hynix have issued warnings that the oversupply of chips is intensifying.
Both Samsung and Micron’s most recent quarterly financial reports showed sharp declines in performance. Micron’s fourth fiscal quarter (June-August) financial report for fiscal 2022 shows that revenue in the quarter fell by about 20% year-on-year; Samsung’s third-quarter financial report ended September 30, 2022 showed that operating profit fell by 31.7% year-on-year.
Prices for DDR5 flash memory could fall by as much as 20% in the fourth quarter due to lower demand for laptops and PCs and slowing server demand. DRAM prices are expected to fall by an average of about 15% in the fourth quarter of 2022, and DDR5 prices will decline more than DDR4 prices in the quarter.
The price of DDR4 flash memory has dropped to a level close to the cash cost of suppliers, on the other hand, the price of DDR5 may still fall further. The price gap between DDR5 and DDR4 chips will narrow further in 2023, when DDR5 is likely to be widely available.
Judging from the use of past products, each new generation of DDR standard needs to be optimized for about 2 years after the release to achieve a more comprehensive and stable improvement in performance. 5 years.
The DR4 memory standard was released in 2012, and its first generation products entered the market in 2014, and it was not until 2016 that a significant increase in market share was achieved. Since the second half of 2021, major memory manufacturers have successively announced mass production of DDR5 products. However, the current price of DDR5 is still relatively high, the performance has not been developed to the best, and the market acceptance is also low.
Industry experts predict that this year will be a warm-up year for DDR5, and from next year, the penetration rate of DDR5 will increase significantly. At present, due to the weak consumer electronics market, the price of memory chips is lower than expected, and major manufacturers are betting on technological innovation and focusing on the rapid launch of DDR5 products. As the price of DDR5 becomes more affordable, its entry into the market may accelerate.
Inventory adjustments by PC OEMs are expected to continue through the first half of 2023. OEMs are also conservative on order visibility for next year as inflation and other macro challenges cloud the overall PC market outlook. PC OEMs are still reluctant to adopt DDR5 memory in their new models, but adoption is likely to accelerate as the price of DDR5 chips plummets. DDR5 is expected to become mainstream in PCs in 2023.
