Driven by the release of new flagship Android models in the first half, the demands for smartphones in Q2 were higher than in Q1, expanding production volume by nearly 3% sequentially, according to DRAMeXchange, a division of TrendForce. This year, 6 GB memory has become a mainstream density for the high-end smartphone market, with the share of 8 GB becoming ever higher than in 2017. As supply remained tight, the second quarter’s contract prices still scored a slight sequential increase. Benefitting from their demand increase and price hikes, the Q2 sales for mobile DRAM grew 5.1% sequentially to US$8.869 billion, a record high.
In Q3, despite the demands from the new iPhone models, the smartphone market will only grow modestly, narrowing the difference between the busy and off seasons, which will dampen the expansion of demands for mobile DRAM in Q3. Due to the release of new capacities and the improved yield rates of cutting-edge processes at various plants, the order fulfillment rates in the second half will increase, as a result of which mobile-DRAM contract prices will remain unchanged sequentially in Q3. Plus sluggish demands in the spot market, TrendForce forecasts that the overall sales of mobile DRAM will slacken in Q3.
Samsung recorded increasing revenue thanks to high-density DRAM orders; SK Hynix is influenced by limited yield rate improvements for its 1X nm process
Among the industry’s major suppliers, Samsung has pioneered the mass productions of high-density mobile DRAM. Together with its stable supply capability, Samsung has enabled the company to pocket the majority of the high-density DRAM orders. Despite the moderate price hikes for the Q2 and Q3 price quotes, Samsung still racked up US$5.043 billion in revenues for its mobile DRAM in Q2, consolidating its leading position. In terms of technology, Samsung's mobile DRAM has shifted to the 1X nm process almost entirely, with only a small amount of its LPDDR3 eMCP still employing the 20 nm process. In 2018, Samsung also started to employ the new 1Y nm process in production on a trial basis, which will be applied in the mass production of products other than mobile phones initially. The company is not expected to provide its early 1Ynm samples for verification by smartphone brands until Q4 this year.
As for SK Hynix, the company’s sales growth in Q1 and Q2 is influenced by the limited improvements of the yield rate for its 1X nm process in the first half, which have led to the insufficient output of the LPDDR4 series and the limited delivery amount of high-density DRAM. In Q2, SK Hynix’s mobile-DRAM revenues inched up by only 1.4% sequentially, to US$2.152 billion, ranking second place globally. In terms of its technology developments, SK Hynix’s share of the 1X nm process for the LPDDR4 series will begin to increase in Q3, due to the increased yield rate of the technology. In the future, it is expected that the company will gradually shift towards the 1X nm process for its LPDDR3 series, which is still employing the 25 nm process, in order to enhance its overall cost advantage and market share.
Stock-up demands from Apple for new iPhones contributed to Micron’s revenue growth; Nanya Technology and Winbond made changes in product mixes
In Q2, Micron’s mobile DRAM revenue topped US$1.551 billion, up 10.2% sequentially, which is the highest among the top three suppliers for the second quarter in a row. TrendForce credits its Q2 growth to the stock-up demands of Apple for the new iPhone models and the market’s average price hikes. Given the company’s strategy of concentrating on a limited number of customers, the sales of Micron's mobile DRAM will be highly susceptible to the changes of its customers' purchase policy. Having already shifted to the 1X nm process entirely in Q2, Micron Memory Taiwan (MMT, originally Rexchip) plans to move towards the 1Z nm process directly next year, skipping the 1Y nm process. With the 20 nm process remaining its mainstream process in the first half, Micron Technology Taiwan (MTTW, originally Inotera) has started to shift towards the 1X nm process, whose share is expected to exceed 50% by the end of the year. Micron will raise the share of its LPDDR4 series further and is expected to stop supplying the LPDDR3 series to branded smartphone customers from mid-2019.
With regard to Taiwan’s suppliers, the Q2 mobile DRAM sales of Nanya Technology Corp. plunged by 14.2% sequentially to US$83 million, as the company had cut the share of mobile DRAM due to its lower margin, according to TrendForce. The 30 nm die shrink currently remains Nanya’s mainstream process, and the company will increase the share of its 20 nm process for such products as LPDDR4 following the gradual maturity of this technology. Despite its steady demands, the mobile DRAM revenue of Winbond also dropped in Q2, by US$5 million, or 10% sequentially, to US$39 million, with its market share reaching only 0.4%, due to its limited capacity and consideration of profit margin.