High Volume –

Mainstream Memory

Craig Stice
Chief Analyst
[email protected] © 2021 Omdia Brought to you by Informa Tech
 Omdia Memory Market Intelligence Services, 1Q21

Mainstream memory-
what is DRAM & NAND?
• DRAM and NAND are the high-volume, commodity memory semi-components, working Figure 1: Memory Revenue vs. Total Semi Revenue ($Billions USD)
together in a system (such as PC, server, smartphone), but for different reasons.
$140
– DRAM manages your data, requires power (volatile)
– NAND stores your data, does not require power (non-volatile)
$120
• Memory is in just about all electronics
– Enterprise (server & data center), PC, and Mobile make up 80+% of DRAM and NAND $100
demand.
– TV’s, game console, removeable storage cards, automotive, smart speakers, other CE, $80
Industrial & medical applications, military, etc.

• In 2020, DRAM & NAND combined revenue reached ~$120 billion. $60

• In 2020, the total semiconductor market reached revenue of ~$470 billion.

$40
– DRAM & NAND made up ~25% of worldwide total semi revenue.

• DRAM & NAND are a significant influence on the overall semiconductor market. $20

$0
1Q20 2Q20 3Q20 4Q20
Source: Omdia © 2021 Omdia
DRAM & NAND Total Semiconductor

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Memory cycles of DRAM & NAND

• The memory industry is well understood to be cyclical, driven by supply and demand.

• Most recently, following record revenues in both 2017 and 2018, 2019 was a historical down cycle for both DRAM and NAND as demand grew stagnant, memory bit growth persisted,
and inventory levels increased resulting in aggressive average selling price (ASP) declines.
– In the memory industry, what goes up, typically comes down, then back up……..

• In 2020, the memory industry bounced back, even during a worldwide pandemic.
– It takes a lot of infrastructure to support work-from-home, educate-from-home, and entertain-from-home environments.

• Looking ahead, we expect cycles to continue as strong revenue years is re-invested into capacity expansion.

Figure 2: Memory Revenue

$120 80%
$100 60%

Total Revenue YoY Change

DRAM & NAND Memory
Revenue (US$ billions)

$80 40%
$60 20%
$40 0%
$20 -20%
$0 -40%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

NAND DRAM Total Revenue YoY % Change

Source: Omdia © 2021 Omdia

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Looking back at 2020

2020 Review
• The year 2020 had been projected to be a rebound year from a disastrous 2019.
– Then COVID-19 hit………

• Scares of memory production shut-downs, logistical issues, and demand going stagnant put the market on high caution.
• Smartphones took the early big hit in demand.
– ~200 million smartphones were taken out of the total 2020 forecast in early 1Q20 due to COVID-19.

• However, memory demand from datacenters erupted due to “at-home” environments.

• PC markets flourished as corporate, consumers, and educational markets were upgrading PCs for at-home use.
• At-home entertainment spiked (TV, gaming).
• Memory pricing increased in 1H20.
• By 2H20, the mobile markets had bounced back, PC demand continued to outperform, but the enterprise markets went into an inventory management
phase and demand slowed.
• Memory pricing began to decline in 2H20.

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Memory Long-Term Assumption (Demand)

Short-term (2021) Mid-term (2022-2024) Long-term (beyond 2024)
• Strong home entertainment demand (TV, Set-top-box, • Mild correction in consumer device (TV, Set-top-box) • Continued demand of consumer electronic devices
Consumer smart speaker) • Continued IoT demand

• Strong game console demand (new SSD demand) • Mild correction in game consoles and GPUs • Multi-year cycle of new game consoles and GPUs
Graphics
• GPU demand boosted by Cryptocurrency mining

• Recovery of smartphone • Saturated 5G smartphone Set • Replacement demand of smartphone

Mobile
• Continued low/mid-tier priced 5G smartphone • growth in low-end segment from emerging countries
launches

• Recovery of enterprise server, Intel Ice Lake launch • DDR5 Replacement Demand, SSD buildout continues • Edge computing, A.I momentum continues
Server • HDD cold storage replacement with SSD
• Cloud server demand is slower than last year • Edge Server, AI momentum

• Strong Demand: Educational & Gaming Notebook • Stability from Notebooks • Replacement demand of Enterprise segment
PC • Continued positive momentum of low-end segment
• Caution for a possible softening in 2H21

Source: Omdia © 2021 Omdia

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DRAM Memory Technology & Manufacturing Figure 3: 3Q20 DRAM revenue share

DRAM Technology

• DRAM has historically gone through “die shrinks”.

– The printed x/y memory cell pattern on the silicon wafer gets smaller and smaller with next generation lithography
nodes and architectural changes.
– Next generation die brings higher capacity, faster speeds, lower power.
– More die per wafer, more bits per wafer = better cost per wafer.

• However, as DRAM moves down the roadmap, next generations are becoming more challenging (longer time between
generations), more expensive, and not as big of a cost savings.

DRAM Manufacturing

• Three manufactures make up roughly 95% of all DRAM revenue.

– Samsung, SK hynix, and Micron
– By comparison, in 2008 the same three made up only ~60% revenue share.
– Very volatile markets lead to strong supply growth, fierce competition, and ultimately M&A. Samsung SK hynix Micron

• With only 3 major player, and with DRAM technology getting challenging and longer to get to next generations, DRAM Nanya Winbond Elite
output is much more stable.
ISSI Etron Other
• CXMT – New DRAM manufacture starting up in China
Source: Omdia © 2021 Omdia

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NAND Memory Technology & Manufacturing

Figure 4: 3Q20 NAND revenue share

NAND Technology

• Beginning in 2017, the NAND industry went through a 2D → 3D NAND architecture change.
– NAND performed die shrinks as far as it could go, so went vertical.
– Think of it as a single-story home to a high-rise apartment. Same footprint but more capacity.

• These vertical layers create more bits per wafer, better cost, higher capacity (with more layers).

• Today, the NAND industry is on 96-layer 3D NAND, with 128-layer in early production.

• There is no declaration of how high the industry can stack, but it will become more challenging to achieve ideal yields.

NAND Manufacturing

• Samsung, SK hynix, and Micron also manufacture NAND, and the three comprise of roughly 67% of worldwide NAND
revenue.
Samsung Western Digital
• Kioxia (formerly Toshiba Memory) and Western Digital have a partnership, near splitting wafer output.
Kioxia Micron
• Intel is being acquired by SK hynix beginning late 2021.
SK hynix Intel
• YMTC is the new company out of Wuhan, China but still very small output. YMTC Other
Source: Omdia © 2021 Omdia

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Summary

• DRAM and NAND combined is a $100+ billion industry, but very cyclical and driven by supply and demand.
• DRAM and NAND make up ~25% of the total semiconductor industry.
• PC’s, mobile, and enterprise (data center/server) make up roughly 80% of all DRAM & NAND demand.
• Overall, the memory industry is expected to continue to grow to meet demand from consumer electronics, hyperscale data centers, AI, IoT, autonomous
vehicles. However, technology challenges will only persist in the years ahead.
– DRAM die shrinks are becoming more challenging, but with three manufactures making up most of the DRAM output, supply can be more stable and
predictable.
– NAND has gone vertical, now at 96-layers and moving to 128-layers.

• DRAM and NAND are a significant influence on the total semiconductor market, either up or down.

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