Stepping into the fourth quarter of 2023, the memory market is witnessing a comprehensive uptick in DRAM and NAND Flash prices. This surge, attributed to the gradual impact of companies’ production cuts and sustained robust demand in specific application markets, is poised to continue into the first quarter of the following year.

TrendForce’s analysis reveals an estimated 13-18% increase in Mobile DRAM contract prices for the fourth quarter, while eMMC and UFS NAND Flash contracts are expected to see a rise of about 10-15%. Looking forward to the first quarter of 2024, the upward trajectory in overall memory prices is anticipated to persist. The contract prices for Mobile DRAM and NAND Flash (eMMC, UFS) are expected to continue ascending, contingent on whether companies uphold a conservative production strategy and if there’s tangible consumer demand support at the end.

The memory market, coming out of its challenging phase, is not just experiencing increases in prices but is also anticipated to gain momentum from various factors contributing to its revival.

AI-Driven Surge in Smartphone Memory Capacities

According to reports from Wccftech, a notable trend in 2024 is the rise of terminal AI, now integrated into various chipsets like Snapdragon 8 Gen 3, Dimensity 9300, and Exynos 2400. Smartphones with AI demand more memory, with the expectation that Android phones featuring built-in AI will require a minimum of 20GB RAM.

While 8GB RAM remains the standard for Android phones, there are now phones in the market boasting higher RAM capacities than most laptops or PCs, though it has yet to become ubiquitous. Industry experts suggest that to smoothly execute AI image feature in the future, Android phones will need at least 12GB RAM. Considering AI applications and other features, phones will require over 20GB RAM for seamless operations.

Given that numerous Android phone brands are actively investing in AI, 2024 is poised to make AI a focal point for devices. Consequently, the industry underscores that as RAM requirements rise, hardware specifications become more crucial than ever for modern AI devices.

Noteworthy Growth in DDR5 Market Demand

Industry experts anticipate significant growth in demand for the DDR5 market, fueled by decreasing prices and the continuous improvement in companies’ yields.

As a high-value-added DRAM, DDR5 continues to garner favor from major players. Micron recent announcement of DDR5 memory based on 1β technology, boasting speeds of up to 7200 MT/s, signifies a shift toward the data center and PC markets.

Recently, Micron also introduced a 128GB DDR5 RDIMM memory utilizing 32Gb chips. This series boasts speeds of up to 8000 MT/s and is suitable for server and workstations. Employing Micron’s 1β technology, these series contribute to a 24% improvement in energy efficiency and 16% reduction in latency. Furthermore, Micron plans to launch models with speeds of 4800 MT/s, 5600 MT/s, and 6400 MT/s in 2024, with an upcoming model featuring a speed of 8000 MT/s in the future.

In terms of Samsung, it is reported to expand its DDR5 production line. Given the high value of DDR5 and its adoption in the PC and server markets, this year is considered a “year of large-scale adoption of DDR5.”

Improvement in HBM Supply Situation

Similar to DDR5, HBM, a high-value-added DRAM, has attracted significant attention this year. Fueled by the AI trend, the demand for the HBM market has surged, leading to an expansion in HBM production capacity.

TrendForce’s research indicates that looking ahead to 2024, the HBM sufficiency ratio is expected to improve, shifting from -2.4% in 2023 to 0.6%. With the AI boom driving demand for AI chips in 2023 and 2024, companies are increasing HBM capacity, anticipating a significant improvement in the HBM supply in 2024.

In terms of specifications, as the performance needs of AI chips increase, it’s anticipated that HBM3 and HBM3e will become the dominant choices in 2024. In general, with a rise in demand and the higher average selling prices of HBM3 and HBM3e compared to older versions, the revenue from HBM is expected to experience significant growth in 2024.

(Image: Qualcomm)

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According to TechNews’ report, during a recent financial conference, Samsung revealed its plans to diversify its sales structure by expanding its clientele in the fields of artificial intelligence semiconductors and automotive, moving away from its previous heavy reliance on the mobile sector.

As of 2023, it is understood that Samsung’s foundry sales distribution includes 54% from mobile, 19% from high-performance computing, and 11% from automotive.

According to a report from Wccftech, senior executives at Samsung have indicated that major players such as super-scale data centers, automotive original equipment manufacturers (OEMs), and other clients have been in contact with Samsung, considering the adoption of Samsung’s foundry services to manufacture their designed chips.

This includes the in-development 4-nanometer artificial intelligence accelerator and the 5-nanometer chips for the top-ranked electric vehicle company. Currently, Samsung is gearing up with its advanced packaging solution called SAINT (Samsung Advanced Interconnection Technology), aiming to compete with TSMC’s advanced packaging, CoWoS. Based on information disclosed by Samsung, there might be a collaboration with AMD in the field of artificial intelligence, involving the manufacturing of certain chips.

In fact, recent rumors suggest that Samsung has already reached an agreement with AMD to provide HBM3 and packaging technology for the upcoming Instinct MI300 series. Additionally, AMD might adopt a dual-sourcing strategy for the Zen 5 series architecture, choosing TSMC’s 3-nanometer process and Samsung’s 4-nanometer process technology for manufacturing the next-generation chips.

According to sources, besides the artificial intelligence domain, Samsung is likely to have received orders from the electric vehicle giant Tesla. The speculation points towards the possibility of fulfilling orders for Tesla’s next-generation HW 5.0 chip, designed for fully autonomous driving applications.

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(Photo credit: Samsung)

In recent years, the dynamics of the memory market have undergone significant changes, with South Korean memory giants Samsung and SK Hynix facing intense competition from Chinese firms. They are experiencing heightened competitive pressures, and the technological gap is steadily narrowing.

As per reports from South Korean media outlet Business Korea, insiders in the market have disclosed that with China increasing its support for the memory industry, after several years of development, the technological gap in NAND Flash with leading global enterprises has now narrowed to approximately two years. However, in the case of DRAM, the original technological gap of about five years is still maintained.

The report indicates that the primary reason for the shortened gap is that the threshold for NAND Flash technology is relatively lower, allowing for a faster catch-up speed, and this acceleration is continuously progressing, thereby further reducing the technological disparity.

China’s largest memory semiconductor company, YMTC (Yangtze Memory Technologies Co.), officially unveiled its fourth-generation 3D TLC NAND Flash memory, named X3-9070, based on the Xtacking 3.0 architecture, at the 2022 Flash Memory Summit (FMS).

YMTC has also taken the lead over Samsung and SK Hynix by achieving production of NAND Flash memory with a higher number of layers.

It is understood that in the year 2022 alone, investments from the Chinese government and state-owned investment funds amounted to approximately CNY 50 billion. The continuous and substantial funding is aimed at supporting development efforts, encompassing both technological catch-up and faster market penetration.

The report emphasizes that as semiconductor circuit miniaturization approaches its limits, China may seize another opportunity to narrow the technological gap, particularly in advanced packaging techniques.

China, being the world’s second-largest packaging technology market, boasts a more comprehensive ecosystem. Companies like JCET, Tongfu Microelectronics Co., and HT-Tech have all secured positions in the top ten semiconductor packaging enterprises globally, while no Korean companies made the list.

TrendForce pointed out that there is indeed a technological difference of about two years between South Korean memory giants and Chinese firms. YMTC has the research and development capabilities but is primarily hindered by the lack of key equipment for mass production. The subsequent developments depend on whether China can acquire crucial semiconductor equipment. If successful, YMTC may have the opportunity to transition to higher levels, such as 300 layers, and proceed to mass production.

(Photo credit: Samsung)

According to IJIWEI’s report, NVIDIA recently confirmed that it is actively working on new “compliant chips” tailored for the Chinese market. However, these products are not expected to make a substantial contribution to fourth-quarter revenue.

On November 21, during NVIDIA’s earnings briefing for the third quarter of 2024, executives acknowledged the significant impact of tightened U.S. export controls on AI. They anticipated a significant decline in data center revenue from China and other affected countries/regions in the fourth quarter. The controls were noted to have a clear negative impact on NVIDIA’s business in China, and this effect is expected to persist in the long term.

NVIDIA’s Chief Financial Officer, Colette Kress, also noted that the company anticipates a significant decline in sales in China and the Middle East during the fourth quarter of the 2024 fiscal year. However, she expressed confidence that robust growth in other regions would be sufficient to offset this decline.

Kress mentioned that NVIDIA is collaborating with some customers in China and the Middle East to obtain U.S. government approval for selling high-performance products. Simultaneously, NVIDIA is attempting to develop new data center products that comply with U.S. government policies and do not require licenses. However, the impact of these products on fourth-quarter sales is not expected to materialize immediately.

Previous reports suggested that NVIDIA has developed the latest series of computational chips, including HGX H20, L20 PCIe, and L2 PCIe, specifically designed for the Chinese market. These chips are modified versions of H100, ensuring compliance with relevant U.S. regulations.

As of now, Chinese domestic manufacturers have not received samples of H20, and they may not be available until the end of this month or mid-next month at the earliest. IJIWEI’s report has indicated that insiders have revealed the possibility of further policy modifications by the U.S., a factor that NVIDIA is likely taking into consideration.

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(Photo credit: Nvidia)

Equipment is playing an indispensable role during the wafer manufacturing process. In response to market needs, the global EUV lithography supplier, ASML, has recently taken significant steps.

ASML’s Bold Move: Annual Investment of EUR 100 Million in Berlin Plant

As reported by the German media “Handelsblatt,” the Netherlands-based company ASML plans to invest EUR 100 million (USD 109 million) in 2023, with a similar annual investment in the subsequent years. This investment aims to enhance the production and development capabilities of ASML’s manufacturing plant located in Berlin, Germany.

Reports indicate that ASML’s Berlin plant primarily produced core components of EUV equipment, including wafer clamps, wafer tables, reticle chucks and mirror blocks. ASML acquired this facility, known as “Berliner Glas,” in 2020.

Foundries Actively Pursue EUV equipment

The EUV equipment plays a crucial role in manufacturing, utilizing specific wavelength light for radiation to precisely imprint images on wafers. Currently, the EUV equipment market is highly concentrated, with only a few global companies mastering this technology. Among them, Dutch company ASML stands out as the world’s largest and most advanced EUV company. Additionally, companies like Nikon, Canon, and Shanghai Micro Electronics Equipment (SMEE) are strategically positioning themselves in the EUV sector.

EUV technology, used for exposing semiconductor process, is indispensable due to its high cost, complex processes, and limited supply. ASML is the sole global supplier of EUV. For advanced processes below 7nm, EUV serves as an essential device. Developed over more than 20 years, EUV technology has become the cornerstone of advanced processes, enabling the continuation of Moore’s Law for at least another decade.

As a crucial EUV equipment supplier, ASML is working on a new generation of NA-EUV equipment, where “NA” represents numerical aperture. A higher NA value means a higher achievable resolution, allowing for more transistors on the chip. It is expected that by the year-end, ASML will unveil the world’s first high-NA EUV and deliver it to Intel.

Currently, both TSMC and Samsung utilize EUV equipment for manufacturing, covering TSMC’s 7nm, 5nm, and 3nm processes and Samsung’s EUV Line (7nm, 5nm, and 4nm) located in Hwaseong, Korea, along with the 3nm GAA process.

TSMC’s 2nm process will continue to leverage EUV technology. In a previous announcement in September, TSMC disclosed the acquisition of Intel’s subsidiary IMS for up to US 432.8 million, focusing on the research and production of electron beam lithography machines. Industry experts believe that TSMC’s move ensures the technical development of critical equipment and meets the supply demand for the commercialization of 2nm.

Following 2nm chips. Samsung plans to achieve mass production of 2nm processes in the mobile field by 2025, expanding to HPC and automotive electronics in 2026 and 2027, respectively. According to the report in September, Samsung is gearing up to secure the yield of the next-generation EUV equipment, High-NA, with the prototype expected to launch later this year and official supply next year.

After announcing its return to the foundry business, Intel revealed in October that it has commenced mass production of Intel 4 process nodes using EUV technology. Currently, both Intel 7 and Intel 4 have achieved mass production, and Intel 3 is progressing according to plan, with the goal of completion by the end of 2023.

(Image: ASML)