STATUS OF THE MEMORY INDUSTRY - MARKET UPDATE

Memory markets poised for major changes as COVID-19 weighs on demand

Extracted from: 
Status of the Memory Industry 2020 report, Yole Développement, 2020
YMTC 3D NAND Flash Memory report, System Plus Consulting, 2020
NAND Quarterly Market Monitor, Yole Développement, 2020
DRAM Quarterly Market Monitor, Yole Développement, 2020
3D NAND Memory Comparison 2019 report, System Plus Consulting, 2019

OUTLINES:

  • In the long term, NAND and DRAM market revenues are expected to grow up to US$82 billion and US$95 billion respectively, by 2025. Yole Développement (Yole) announces a 11% CAGR for the NAND market and 7% for the DRAM one, between 2019 and 2025.
  • Market status per technology:
    NAND and DRAM account together for the main part of the overall stand-alone memory market, with 96% market shares in 2019.
    Other memory technologies represent only about 4% of memory business.
    3D XPoint is poised to grow in datacenter applications.
  • China is entering the NAND business with aggressive plans, whereas China DRAM developments continue to advance.
  • COVID-19 outbreak:
    The DRAM revenues will be growing modestly, about 5% in 2020.
    From the NAND side, market figures are much better with about 35% of revenue growth.
    2020 DRAM ASP is directly impacted, announce Yole in its memory report and Q2 2020 memory monitor, around -9% from 2019, although growing on a quarterly basis starting from Q1 2020.
    NAND ASP started growing earlier in Q4 2019. On a yearly basis, the NAND ASP will grow 6% in 2020.
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“Despite the COVID-19 outbreak, which negatively impacted the smartphone and automotive industries, but spurred demand for server and PC memory for stay-at-home activities, 2020 is expected to be a year of recovery,” asserts Simone Bertolazzi, PhD, Technology & Market analyst, Semiconductor, Memory & Computing, at Yole Développement (Yole). “At Yole, we see the beginning of a new era of prosperity for the memory industry.”
Driven by important megatrends such as mobility, cloud computing, AI and the IoT , the stand-alone memory market has experienced extraordinary growth over the past decade.
However, this exciting growth period ended in Q4-2018 when both the NAND and DRAM markets started experiencing oversupply caused by weak demand. This included lower-than-expected smartphone sales and a slowdown in datacenter demand. Inventory levels increased for memory suppliers and their OEM customers, with ASP ($/Gb) declining by more than 49% in 2019. Meanwhile, combined DRAM and NAND revenue reached ~$106B, down 34% from 2018. In 2019, significant DRAM and NAND capex cuts initiated a market recovery that began in late-2019, and which has continued in 2020.

In this context, Yole and its partner System Plus Consulting investigate disruptive memory technologies and related markets to point out the latest innovations and underline the business opportunities.
In this regard, both companies combine their technology and market expertise and propose deep added value collection of reports and monitors:
• A market and technology report, titled Status of the Memory Industry 2020 co-authored by the Yole’s Memory team.
This 2020 edition gives a comprehensive overview of the stand-alone memory market, including NAND, DRAM, NOR, 3D XPoint, (NV)SRAM, and more as well as detailed technical roadmaps, an overview of the memory activities all around the world, the competitive landscape and strategies of the leading memory companies.
This report gives a breakdown of the memory market from a system point of view, detailing present and future memory needs for servers, smartphones, personal computers, enterprise/client SSDs, and vehicles.
Taking into account the COVID-19 outbreak, Yole’s analysts reveal a complete review of the industry and future trends.
• The structural, process & cost analyses from System Plus Consulting: 3D NAND Memory Comparison 2019 and YMTC 3D NAND Flash Memory.
This latest report is based on a complete teardown analysis of the 3D NAND Memory developed by the leading memory company, Yangtze Memory Technologies Co. This study details the fabrication steps of YMTC ’s latest 64-layer NAND dies. The physical analysis included in this report, reveals the Xtacking architecture adopted by YMTC.
“Featuring a comparison of YMTC’s 64-layer NAND with the other 64-layer NAND memories from main NAND manufacturers like Samsung, Kioxia and Micron, this study helps to compare the YMTC cell features and highlights the similarities and differences from other 64-layer NAND”, explains Belinda Dube, Semiconductor Memories and Integrated Circuits analyst at System Plus Consulting.
• Finally, quarterly market monitors released by Yole since 2018, NAND Quarterly Market Monitor and DRAM Quarterly Market Monitor. Yole’s memory monitors are published every beginning of March (Q1), June (Q2), September (Q3) and December (Q4). Aim of the Yole’s Memory team is to give a closer look at the main markets and players.

What are the economic and technological challenges? What are the key market drivers? Who are the suppliers to watch? What are the innovative technologies, they are working on? With a special focus on YMTC, what are the key technical choices for its 64-layer NAND? What is the added value of this solution?
What are the impacts of COVID-19 outbreak on the memory industry in both short and long terms? Yole and System Plus Consulting present today their vision of the memory industry.

As analyzed by Yole’s team in its 2020 report, Status of the Memory Industry, NAND and DRAM are ubiquitous technologies, together accounting for 96% of the overall stand-alone memory market. Thus, they determine the overall status and dynamics of the stand-alone memory industry.
However, besides NAND and DRAM, there exists a broad spectrum of technologies that fit the requirements of different end-systems and markets. NOR flash is the third-largest market with around US$2.3 billion in 2019, fueled by numerous applications including industry and security, such as surveillance cameras, consumer, and automotive electronics, as well as telecom infrastructure, like 5G base stations for example. Despite some seasonality and cyclicality, NOR revenue is expected to grow at a 4% CAGR between 2019 and 2025.
Other technologies, such as volatile and NV SRAM, FRAM , and EEPROM represent “niche” markets that are rather static and collectively account for just about 1.5% of the stand-alone memory market.
On the other hand, emerging NVM technologies, like MRAM, PCM, and RRAM, are taking off in the SCM market. Their combined revenue is expected to reach around US$4 billion by 2025, with a 40% CAGR between 2019 and 2020. In this area, PCM will maintain its leadership until 2025 thanks to the involvement of Intel, which leads the persistent memory business with its OptaneTM non-volatile memory modules.

According to Walt Coon, VP of NAND and Memory Research, part of the Semiconductor, Memory & Computing division at Yole “Market concentration has accelerated dramatically in the last decade and is now remarkably high. Three dominant NAND and DRAM players, Samsung, Micron, and SK Hynix, and two pure NAND players, Kioxia and Western Digital, together hold about 90% of the stand-alone memory market”. All these data are deeply analyzed in the NAND Quarterly Market Monitor – Q2 2020.
In 2019, all major NAND manufacturers were developing the new 1xxL generation and ramping-up production of 92/96L 3D NAND. However, to mitigate the oversupply situation, most manufacturers chose to slow their ramping of 92/96L, and many products launched in 2019 were still based on 64L 3D NAND. In this regard, its 3D NAND Memory Comparison 2019 report, System Plus Consulting gives a complete technology and cost analysis of 3D NAND memories from Kioxia/Western Digital, Samsung, SK Hynix and Micron.
Belinda Dube from System Plus Consulting comments:
“In order to accelerate bit growth and reduce NAND cost, all the four top manufacturers have added more word lines to their process. Meanwhile, new competition from YMTC will affect the NAND memory market”.

In addition, in its DRAM Quarterly Market Monitor - Q2 2020, Yole affirms, in the DRAM business, market equilibrium was sought via significant capital expenditure cuts in 2019. Between 25% and 30%, according to Mike Howard, VP of DRAM and Memory Research, part of the Semiconductor, Memory & Computing division at Yole. “And as late as Q3-19, plans existed at suppliers to reduce capital expenditure by as much again in 2020. Both Micron and Samsung are expected to introduce products based on 1z technology by 2020; SK hynix will follow. The most advanced DRAM node by 2025 is expected to be 1 beta”, he adds.

Meanwhile, Chinese players are starting to threaten the market’s equilibrium and could trigger profound changes in the memory business.
In the NAND business, YMTC is the leading memory maker in China. The company is currently shipping 64L NAND domestically in low volumes, including SSDs, with 128L production in development and shipments expected in 2021. YMTC’s 2020 ramp-up has been in part hampered by COVID-19, with delays in equipment deliveries/installations at its Wuhan manufacturing site.
In the YMTC 3D NAND Flash Memory report, Belinda Dube from System Plus Consulting asserts:
“YMTC memory is expected to pick significant market shares in the NAND market revenue. The YMTC memory enters the NAND flash market as a solution to cater for higher I/O (In/Out) Speed because of the use of advanced CMOS that can be manufactured on a different wafer from the NAND Array wafer. This memory provides the combination of high speed and large density characteristics”.
For Simone Bertolazzi from Yole:
“DRAM manufacturing is incredibly difficult, and it will likely take a while longer for China to achieve competitive parity with the industry at-large. CXMT , China’s most advanced DRAM maker, is expected to ramp up production on the 1xnm node in 2020, about three years later than the industry’s leading players”.
As analyzed in the NAND Quarterly Market Monitor, for NAND, Yole expects that significant output, around 4%, from YMTC could reach the market in 2021, while it will take longer for DRAM. Meanwhile, stand-alone NOR flash will remain the sturdiest memory business in China thanks to a well-developed local supply-chain system and the activities of GigaDevice, a key local player.

Without doubts, the memory business is about to change. Yole and System Plus Consulting highlight lot of signs in their report that underline this status. Analysts are daily following the industry and key parameters and discussing with leading memory players to get a clear understanding of their strategy and their ability to innovate. The story will so not stop here.

All year long, System Plus Consulting and Yole Développement combine their expertise and deep understanding of the markets and disruptive technologies to publish numerous memory reports and monitors. In addition, experts realize various key presentations and organize key conferences. In this regard, don’t miss the upcoming event, Flash Memory Summit – 2020 on October 20th in Santa Clara (California).
In parallel, they recommend to watch the DRAM & NAND Market Update: Headwinds Expected from COVID-19 – LIVE MARKET BRIEFING. A recorded version is available on i-Micronews.
Stay tuned!

Acronyms
CAGR: Compound Annual Growth Rate
ASP: Average Selling Price
AI : Artificial Intelligence
IoT : Internet of Things
OEM : Original Equipment Manufacturer
YMTC: Yangtze Memory Technologies Co.
NV : Non-volatile
FRAM : Ferroelectric RAM
EEPROM : Electrically Erasable Programmable Read-only Memory
NVM : Non-volatile Memory
SCM : Storage-class Memory
PCM : Phase Change Memory
CXMT : Changxin Memory Technologies
 

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