Throughout 2017, DRAM manufacturers faced pressure to boost output of their devices—particularly high-performance DRAM used in data center servers, and low-power high-density DRAM used in smartphones and other mobile products. Strong, ongoing demand put significant upward pressure on DRAM average selling prices. This trend continued into 4Q17 and is expected to drive quarterly DRAM sales to an all time high mark of $21.1 billion (Figure 1), capping an incredible year of growth in which DRAM sales set a new all time high sales mark each quarter. The forecast $21.1 billion sales level in 4Q17 would be an increase of 65% compared to the $12.8 billion DRAM market of 4Q16.
With virtual and augmented reality and artificial intelligence becoming prominent features on new smartphones and apps, DRAM content in high-end smartphones shows no signs of slowing. Meanwhile, DRAM growth for smartphones is also stemming from less developed countries, where much of the population is moving from feature phones to their first smartphone—literally transitioning from zero to 1GB of mobile DRAM.
Based on historical trends, the DRAM industry will likely experience a decline (possibly a big market decline) in its growth rate in the not-too-distant future as prices begin to tumble with significant capacity additions and an increase in DRAM output expected over the next year or two. Announcements by Samsung and SK Hynix in the second half of 2017 confirmed that new DRAM capacity is set to come online in 2018, which likely will ease the upward trend of DRAM ASPs next year. Samsung has stated its semiconductor capital expenditure budget for 2017 will be an enormous $26.0 billion, and SK Hynix has announced plans to build a new manufacturing line at its massive facility in Wuxi, China. Micron has gone on record as saying it doubts that it will ever need to build another new DRAM fab, but it is hard to imagine that Micron will sit still as its two fiercest rivals capture additional marketshare. (For the record, Micron and Intel are developing Crosspoint memory as a potential replacement for DRAM).
Further details on the DRAM market well as overall market trends within the IC industry will be provided in the 2018 edition of The McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry , which is IC Insights’ flagship report covering the IC market. The 2018 edition will be released in January 2018. A subscription to The McClean Report includes free monthly updates from March through November (including a 250+ page Mid-Year Update ), and free access to subscriber-only webinars throughout the year. An individual-user license to the 2018 edition of The McClean Report is priced at $4,290 and includes an Internet access password. A multi-user worldwide corporate license is available for $7,290.