Three vendors support 94% of the DRAM business

semiconductor market
Three vendors support 94% of the DRAM business

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High volatility in the memory market over the past 30 years has meant that only six vendors are now significant in the global DRAM market, market analysts at IC Insights say. Over 70 percent world demand is covered by two producers from South Korea.

DRAM strips from SK Hynix: According to IC Insight, the South Korean memory manufacturer now has 27.7 percent, ahead of Micron (22.8 percent) and the second largest share of the global DRAM chip market. The leader here is Samsung with 43.6 percent.

Development of the DRAM market since 1994: The memory business has always been characterized by more or less regularly alternating phases of extreme growth and an equally strong decline.  After a huge spike in 2021, the market is once again heading towards a collapse in prices.
Development of the DRAM market since 1994: The memory business has always been characterized by more or less regularly alternating phases of extreme growth and an equally strong decline. After a huge spike in 2021, the market is once again heading towards a collapse in prices.

(Photo: IC Insights)

The memory market is generally very volatile, whether they are NAND or DRAM components. The latest update of the McClean report by IC Insights now provides even more accurate data for the latter segment.

The number of globally important suppliers has dropped from 20 to six in 30 years

As such, over the past 30 years, the DRAM market has experienced phases of spectacular growth and years of devastating declines (Figure 1). Most recently, the DRAM market fell drastically by 37 percent in 2019, but grew again by almost 42 percent in 2021. There are many reasons for these boom and bust phases: increased capacity is accompanied by falling prices, the boom and bust phases in the mobile and PC industries are reflected in supply and demand in the storage market. In 2019, many manufacturers started using new production facilities for the first time before the corona pandemic that followed shortly after caused demand to pick up again, especially in the consumer market.

Regardless of all these reasons, numerous cycles of boom and bust have drastically reduced the number of major DRAM vendors: IC Insights replaced 20 well-known DRAM chip manufacturers that were significant in the global market in the mid-1990s to only sixth. The three largest vendors – Samsung, SK Hynix, and Micron – had a combined DRAM market share of 94 percent (see also Figure 2). Just two South Korean memory makers, Samsung and SK Hynix, accounted for 71.3 percent of global DRAM sales last year.

IC Insights did not disclose the names of the companies to the other three global players. If you compare the available information for 2021 with data from DRAMExchange or Trendforce, the remaining nearly six percent are Nanya Technology, Winbond and Powerchip, all of which are based in Taiwan. Chinese companies will therefore not play a role in the international market, at least in 2021.

Samsung dominates the market

Market power: Overview of DRAM market shares estimated at $ 96.1 billion in 2021 Samsung, SK Hynix and Micron together account for just over 94 percent of the market, with three other global vendors accounting for less than 6 percent.
Market power: Overview of DRAM market shares estimated at $ 96.1 billion in 2021 Samsung, SK Hynix and Micron together account for just over 94 percent of the market, with three other global vendors accounting for less than 6 percent.

(Photo: IC Insights)

With a market share of 44 percent, Samsung remains the world’s largest DRAM provider in 2021, with sales of nearly $ 41.9 billion. Samsung has expanded its DRAM business on several fronts over the past year. After Samsung was the first company to adopt extreme ultraviolet (EUV) lithography in March 2020, it began mass-producing 14nm EUV-based DRAMs in October 2021. Thus, it increased the number of EUV layers from two to five in its most advanced 14nm DDR5 DRAM process.

Samsung, which is now also the world’s largest chip manufacturer, is impressive above all with its technological dominance. In November 2021, Samsung announced that it was using its EUV technology to develop 16GB of 14nm DRAM with double the data rate at low power consumption (LPDDR5X) specifically for high-speed applications such as 5G, artificial intelligence (AI), learning machine tools (ML) and other big data end-use applications. The company claims that LPDDR5X DRAM memory offers data processing speeds of up to 8.5 Gb / s (1.3 times faster than existing 6.4 Gb / s LPDDR5 devices) and consumes approximately 20 percent less power than LPDDR5 memory. The company also unveiled its first DRAM module to support the new Compute Express Link (CXL) connectivity standard, and unveiled 2 GB GDDR6 and 2 GB DDR4 automotive DRAMs for autonomous electric vehicles and high-performance infotainment systems.

SK Hynix and Micron go head to head in technology

With a DRAM market share of 28 percent in 2021, IC Insights names South Korean supplier SK Hynix, whose DRAM sales increased 39 percent to $ 26.6 billion. This memory segment is also by far the company’s most important market: DRAM accounted for approximately 71 percent of SK Hynix’s total semiconductor sales this year. DRAM servers account for 40 percent, mobile DRAM 35 percent, PC DRAM 15 percent, and consumer and graphics DRAM 5 percent.

In 2021, SK Hynix launched what was considered the most efficient DDR5 DRAM memory in the industry, with a data speed of 163 Full HD movies per second. The chip uses HBM3, the third generation of high-bandwidth memory. Meanwhile, SK Hynix has also started to use EUV lithography to mass-produce 8Gb LPDDR4 DRAM based on the 4th generation 1-alpha (1α-nm) process, a variant of the 10nm process technology.

Micron was the third largest DRAM provider with revenues of $ 21.9 billion in 2021. Microns was able to increase its market share: the company’s DRAM sales increased by 41 percent and thus accounted for 23 percent of the world market share. Overall, DRAM analysts estimate to account for approximately 73 percent of IC Micron’s total sales for the calendar year.

Micron also introduced a 1α-nm process node for memory production in 2021. It will also be primarily geared towards migrating the data center to DDR5 DRAM, which will be powered by new processor platforms to be launched later this year and accelerate in 2023. Micron’s 1α DRAM is also used in low-power communication applications, including 5G smartphones.

Unlike SK Hynix, Micron still produces its 1α DRAM using a technique that does not require EUV lithography. However, this is likely to change for future process nodes: the company has already ordered EUV systems. For the production of future DRAM chips according to the planned 1-gamma (1γ) process node, the company plans to switch to EUV technology from 2024.

Fast and Economical: Micron has already delivered LPDDR5 DRAM chips in 2020.  The company will manufacture the next generation of chips using an optimized process with 1α process nodes.

Lofty goals are gone: In 2019, Intel announced that it wanted to further develop the next generation of QLC flash memory without Micron.  The development has clearly been disappointing: Intel is now selling the NAND division to South Korean memory manufacturer SK Hynix.

(ID: 48369808)

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