After more than two years of stagnation in the memory market, which was exacerbated by production cuts from major players like Samsung and Micron earlier this year, the issue of overstock has finally seen improvement.

As per Nikkei’s report, this has driven an increase in prices for DRAM, marking the first such occurrence in nearly two and a half years. Observers are optimistic that the memory market will hit bottom this year, with a recovery and growth expected in 2024.

According to TrendForce’s data, the contract price for the DDR4 8GB, considered a benchmark product for DRAM, reached USD 1.50 in October, a 15.4% increase from September and the first increase since July 2021. The contract price for the same product continued to rise in November by 10%, reaching USD 1.65.

In addition to the DDR4 8GB product, other specifications of DRAM contract prices generally experienced monthly increases of around 10% in October this year. Generally, memory contract prices are determined collaboratively by chip suppliers and corporate customers, and an increase in contract prices signifies an advantage for suppliers.

There are signs of a bottoming out and rebound in the DRAM market in the third quarter of this year. TrendForce indicated that the global DRAM market’s revenue increased by 18% compared to the previous quarter, reaching USD 13.48 billion.

This growth, reportedly, is primarily attributed to production cuts by major suppliers throughout the year, gradually restoring balance to the market supply and demand.

The report also reflects on the pandemic period, noting that the global surge in remote work initially led to a sharp increase in demand for memory. However, as the pandemic gradually subsided in 2021, market demand cooled.

Additionally, persistent challenges such as high inflation and interest rates impacting consumer spending weakened demand for PCs and various consumer electronic devices. This, in turn, led to global oversupply in memory, causing prices to decline consistently.

Major DRAM manufacturers, including Samsung, SK Hynix, and Micron, have been reducing production since the beginning of this year, and they have recently managed to reverse the downturn.

Samsung reported a 16% revenue growth in the third quarter, while SK Hynix achieved an impressive growth rate of 34.4%. Despite a decline in average selling prices, Micron’s third-quarter chip shipment growth contributed to an overall revenue growth of 4.2%.

Moreover, the global NAND Flash market saw a 2.9% sequential increase in revenue in the third quarter, and a growth rate of 20% is anticipated for the fourth quarter, according to TrendForce’s latest research.

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(Photo credit: Samsung)

As one of the key cases in the US-China tech war, American memory giant Micron Technology had mend relations with China. Recently, Micron said a global settlement agreement with state-backed competitor Fujian Jinhua Integrated Circuit (JHICC) concerning intellectual property theft lawsuits.

According to Bloomberg’s report, on December 24th, Micron has indicated that it has reached a global settlement agreement with Fujian Jinhua Integrated Circuit. A Micron spokesperson stated in an email, “The two companies will each globally dismiss their complaints against the other party and end all lawsuits between them.” However, no further information or details were provided.

In March of this year, the Cyberspace Administration of China conducted a cybersecurity review of Micron products, and in May, it cited cybersecurity concerns as the reason for prohibiting Chinese operators of “critical infrastructure” from using Micron’s chips.

Micron stated that the Chinese restrictions have affected approximately half of its sales related to Chinese customers. Accordingly, Micron derives about a quarter of its global revenue from China and Hong Kong.

Reportedly, industry insiders believe that following the settlement between the two parties, it is not anticipated to have a significant impact on the upward trend of memory prices.

Appeared to have attempted to pacify Beijing, Micron announced in June an increased investment in China, planning to invest over CNY 4.3 billion in the next few years in its packaging and testing facility located in Xi’an, China.

Micron has decided to acquire the packaging equipment of Powertech Semiconductor (Xi’an), planning to construct new facilities at the Micron Xi’an plant and introduce state-of-the-art and high-performance packaging and testing equipment.

In 2017, Micron filed a lawsuit in the United States against Fujian Jinhua and its Taiwanese partner United Microelectronics Corporation (UMC), accusing these two companies of stealing trade secrets related to Micron’s memory.

A year later, as the U.S. Department of Justice intensified actions against China in economic espionage cases, Fujian Jinhua and UMC were charged with conspiring to steal Micron’s trade secrets. The Trump administration at the time placed Fujian Jinhua on the so-called Entity List, prohibiting U.S. component sales to this Chinese DRAM maker.

In 2021, UMC and Micron announced a settlement. UMC admitted guilt in an agreement with U.S. prosecutors, and the prosecution agreed to drop the charges of economic espionage and conspiracy.

Nevertheless, the case against Fujian Jinhua by the US Department of Justice remains pending.

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(Photo credit: Micron)

In the latest financial report and guidance released on the 20th, U.S. memory chip giant Micron outperformed analysts’ expectations for both the last quarter and the current quarter. CEO Sanjay Mehrotra believes that product pricing will rebound next year, with the upward trend continuing until 2025, as Micron aims to return to a path of operational innovation and reach new record levels by 2025, according to The Economic Daily.

Mehrotra anticipates a price recovery in memory prices next year, and rise further in 2025. He reiterated in a statement that 2024 will be a year of recovery for the memory industry setting the stage for record results in 2025.

Micron expects the supply of PC, mobile devices, and other chips to approach normal levels in the first half of next year. Despite two consecutive years of declining PC shipments, Micron forecasts low to mid-single-digit percentage growth in 2024, with signs of a recovery in smartphone demand.

TrendForce also anticipates that the upward momentum in DRAM products is expected to continue until 2025.

The reason behind this is the continuous benefit to the DRAM market from the increasing penetration of premium products such as HBM, DDR5 and LPDDR5. This is expected to have a positive impact on the overall memory prices.

Simultaneously, TrendForce believes that 2025 will witness the emergence of more edge AI applications, such as AI on smartphones or PCs. This is expected to result in an increase in DRAM capacity, becoming the driving force for the next wave of growth in DRAM demand.

(Image: Micron)

Micron Technology, the U.S. memory giant, has surpassed Wall Street expectations in its projected revenue for the current quarter (December-February). The main factor contributing to this success is the robust demand from data centers, offsetting the sluggish recovery in the PC and smartphone markets.

According to Micron’ released fiscal report for their first quarter (from August to November, 2023) on December 20th, Micron’s revenue rose from USD 4.01 billion in the same period last year to USD 4.73 billion.

Looking ahead to the current quarter (Q2), Micron anticipates revenue reaching USD 5.3 billion ± USD 200 million and diluted loss per share reaching USD 0.28 ± USD 0.07, which are better than market’s consensus.

Micron CEO Sanjay Mehrotra noted that strong execution and pricing strategies contributed to Q1 financial results surpassing expectations. He further stated that, ‘Demand for AI servers has been strong as data center infrastructure operators shift budgets from traditional servers to more content-rich AI servers.’

Mehrotra indicated that Micron is in the final stages of qualifying HBM3e to be used in NVIDIA’s next generation Grace Hopper GH200 and H200 platforms. 

Micron now predicts that PC sales are expected to grow by a low to mid-single-digit percentage in calendar 2024, after two years of double-digit percentage PC unit volume declines. There is also hope for smartphone unit shipments to grow modestly in 2024.

For the HBM market, TrendForce’s latest research indicates that NVIDIA plans to diversify its HBM suppliers for more robust and efficient supply chain management. Samsung’s HBM3 (24GB) is anticipated to complete verification with NVIDIA by December this year.

The progress of HBM3e, as outlined in the timeline below, shows that Micron provided its 8hi (24GB) samples to NVIDIA by the end of July, SK hynix in mid-August, and Samsung in early October.

Given the intricacy of the HBM verification process—estimated to take two quarters—TrendForce expects that some manufacturers might learn preliminary HBM3e results by the end of 2023. However, it’s generally anticipated that major manufacturers including Samsung, SK Hynix and Micron will have definite results by 1Q24. Notably, the outcomes will influence NVIDIA’s procurement decisions for 2024, as final evaluations are still underway.

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(Photo credit: Micron)

Micron, the American memory giant, is gearing up to initiate the production of state-of-the-art “1γ” DRAM at its Hiroshima fab in Japan, starting in 2025. Concurrently, there are plans to manufacture High-Bandwidth Memory (HBM) at the same fab, tailored for the rising demand for generative AI applications.

According to a report from Nikkei Asia on December 13th, Joshua Lee, VP at Micron Memory Japan, made this announcement during the event SEMICON Japan 2023. Lee highlighted that the Hiroshima fab is slated to manufacture DRAM with the most advanced “1γ” process by 2025. He also pointed out that Micron is also going to be the first semiconductor company to introduce Extreme Ultraviolet (EUV) lithography equipment to Japan.

In addition to this, Lee shared insights into Micron’s intentions to produce HBM at the Hiroshima fab, which is widely applied for generative AI applications. He stated that Japan’s strong semiconductor ecosystem will be a key driving force behind Micron’s progress. Furthermore, he emphasized that collaboration is pivotal for Japan to establish itself as a global leader in the semiconductor supply chain.

Earlier In October, the Ministry of Economy, Trade, and Industry (METI) of Japan announced a substantial subsidy of JPY 192 billion for Micron’s Hiroshima fab. Micron has recently declared a comprehensive investment plan of JPY 500 billion in Japan over the next few years, encompassing the Hiroshima fab.

Micron has been actively developing its DRAM manufacturing operations in Japan and Taiwan. Donghui Lu, Corporate VP of Micron Taiwan, revealed in a September interview with the UDN News that approximately 65% of Micron’s DRAM output originates from Taiwan. Regarding the migration to the 1β process, mass production began at Micron Japan last year, and Micron Taiwan has also commenced mass production this year. As for the more advanced 1γ process, production is expected to take place in both Taiwan and Japan by 2025.

TrendForce’s analysis has also revealed that Micron is leveraging its 1β nm technology to produce HBM3e in a bid to gain a competitive edge over Korean suppliers. Its front-end manufacturing is strategically positioned in Japan, aligning with expansion plans for 1β nm capacity.

Additionally, Micron has established a backend factory in Taiwan to meet surging HBM demands driven by the AI era. TrendForce anticipates that HBM products will substantially boost the revenue of DRAM suppliers in 2024.

(Image: Micron)

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