Memory chips are an essential part of an end product and an important section of the semiconductor market. Historically, memory revenue growth is usually in positively related to semiconductor chip growth as shown in this graphic:
In the graph the orb surrounds all years from 1977 to 2013, besides the years that are labeled out. Thus, to understand the trends within the semiconductor market, the memory segment is a good starting point. As we are approaching the end of 2015, we thought it would be interesting to take a look at the forecast of the semiconductor industry for 2016, starting with memory.
How did the memory market do so far?
According to Statista, global DRAM revenue reached $23.45 billion in the first half of 2015, increased 12.9% in the first half of 2014. This number is in line with research firm ReportsReports.com, stating that the Global DRAM market’s annual CAGR is expecting to grow to 13% between 2015 and 2019. TrendForce reports that DRAM revenue only dropped 1.2% and the share of mobile DRAM expanded from 33.7% to 40%.
What to expect in 2016?
Smartphones, especially the devices with high memory density, remain to be the force behind major growth in the mobile DRAM market. Depending on different smartphone variations, DRAM could vary between 178 MB and 4 Gb. The popularity of IoT and cloud computing is shifting manufacture’s R&D to develop higher-density DRAM that focus on the server and cloud computing segment.
What can we expect to see in the supplier base?
The DRAM market is still dominated by Korean, American, and Taiwan companies in 2015; however, another player worth noting is China.
Under the Chinese national policy the strategy is to build a self-sufficient semiconductor industry. As a result of this, there have been many activities from Chinese companies or investment firms in the global semiconductor industry, especially in the memory market. Tsinghua Unigroup Ltd., a company with Chinese government support, bought 15% of Western Digit after an unsuccessful effort to acquire Micron. Earlier this month, Tsinghua Uni group bought Tongfang Guoxin Electronics Co to build a new memory-chip plant together with $12 billion investment. Additionally, the worlds leading chipmaker Intel Corp., will invest around $5.5 billion in China to convert its factory to manufacture memory chips. Micron is also reported to have “greater participation” in this plant in the future. It’s still early to count China as one of the major supplier in the memory market, but it is definitely a trend for the electronic industry to keep an eye on.
As a leading independent distributor for electronic components, Advanced MP Technology supports customer needs with our broad line of products, inventory asset management programs, and quality service. We have procurement specialists that focus on memory components and are aware of the changes within the industry.