Memory manufacturer Micron Technology stated on April 11 that the earthquake in Taiwan on April 3 has impacted its DRAM supply, estimated to be between 4-6% (mid-single digit percentage).

Micron emphasized in an 8-K filing with the U.S. Securities and Exchange Commission (SEC) that the earthquake did not cause permanent damage to its facilities, infrastructure, or equipment, and will not have a long-term effect on DRAM supply.

Micron noted that as of now, DRAM production post-earthquake has not fully recovered, but progress in facility restoration is promising thanks to efforts by the Taiwan team.

In February this year, Micron announced the commencement of mass production of high-bandwidth memory (HBM) chips, designed for use in NVIDIA’s H200 GPU for AI applications.

In March, Micron CEO Sanjay Mehrotra indicated that the company’s HBM chips earmarked for AI applications are sold out for 2024, with much of the 2025 supply already allocated.

Micron previously described HBM chips as utilizing stacked DRAM technology. The company did not specify whether the HBM supply would be affected by the earthquake.

Per a previous TrendForce press release, the three major original HBM manufacturers held market shares as follows in 2023: SK Hynix and Samsung were both around 47.5%, while Micron stood at roughly 5%.

As per Micron’s previous report, regarding growth outlooks for various end markets in 2024, the annual growth rate for the data center industry has been revised upward from mid-single digits to mid-to-high single digits, while the PC industry’s annual growth rate remains at low to mid-single digits. AI PCs are expected to capture a certain market share in 2025. The annual growth rate for the mobile phone industry has been adjusted upward from modest growth to low to mid-single digits.

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• [News] Micron’s Financial Report Reveals High Demand for HBM in 2025, Capacity Nears Full Allocation
• [News] Micron Begins Mass Production of HBM3e for NVIDIA’s H200

(Photo credit: Micron)

Following the shortage of HBM memory production capacity, the memory market is experiencing another shortage. As the memory market plunged into a downturn in 2021, SSD prices continued to slide for about two years. In response to market changes, memory manufacturers reduced production of NAND Flash. With the effective implementation of production reduction strategies, demand partly increased, leading to a tightening supply of SSD.

Recently, it’s reported that NAND Flash product market has experienced a shortage in enterprise SSD.It’s believed that this is mainly due to the AI boom, coupled with the large-scale construction of data centers by global technology giants, which has significantly increased the demand for memory devices, resulting in a tight supply of SSDs. In this context, major memory manufacturers began to take action.

Amid the SSD Supply Shortage, Suppliers Raise Prices Drastically

1. Samsung Hikes Prices of Enterprise SSD

Over the past two weeks, it’s frequently reported that enterprise SSD faced a shortage, prompting the major memory manufacturer Samsung to consider a price increase of 25% on enterprise SSD.

According to a report from BusinessKorea on April 2nd, Samsung is rumored to implement a price increase of 20-25% on enterprise SSD in 2Q24, aiming to reverse the downward trend experienced since 2023. Initially, Samsung planned to raise prices by around 15% from the previous quarter. However, due to higher-than-expected demand, Samsung has decided to expand the price increase. As Samsung holds approximately half of the market share in enterprise SSD, it will exert a significant influence over pricing decisions.

As per a research by TrendForce on March 7th, Samsung dominated the global enterprise SSD market with a market share of 41.7%, followed by SK Hynix (33.2%), Micron (10.8%), Kioxia (9.4%), and Western Digital (4.9%) in 4Q23.

It is worth mentioning that these five companies are also among the top five NAND Flash memory giants globally. These original manufacturers not only produce NAND Flash memory but also develop controller ICs and manufacture enterprise SSD products.

According to previous study by TrendForce, the controller IC field is mainly divided into two major camps: One contains the aforementioned memory manufacturers, who generally do not sell controller ICs externally, although Micron’s controller ICs are used both in their own products and sold to other manufacturers; the other refers to IC design companies, represented by companies such as Marvell, SIMO, and Phison.

As a pioneer in controller ICs field, Marvell occupies the high-end market for a long time, supporting the use of high-performance and large-capacity SSD in enterprise and large-scale data center environments. SIMO and Phison gain their foothold in the enterprise SSD market on the strength of cost-effectiveness advantages.

On the supply side, Wallace C. Kou, GM of SIMO, previously stated that prices for NAND Flash in 2Q24 have already been negotiated, with a 20% increase expected. He indicated that some suppliers began to rear profit in 1Q24 and more are expected to rake in money in 2Q24.

According to TrendForce, apart from Kioxia and Western Digital, which have increased their capacity utilization rates since 1Q24, other suppliers have generally maintained a low production strategy. Although NAND Flash purchases in 2Q24 have slightly decreased relative to 1Q24, the overall market situation continues to be affected by reduced inventories and production cuts. The contract price of NAND Flash in 2Q24 is estimated to rise strongly by about 13-18%.

Benefited from the increase in demand from cloud service provider (CSP) in North America and China, it is expected that the procurement volume of enterprise SSD will grow quarter by quarter in 1H24. Due to the low Order Fill Rate (OFR) for high-capacity SSD orders, suppliers still dominate the price trend, and buyers is forced to accept the increased possibility of supplier prices.

Meanwhile, some buyers still attempt to increase their inventory levels before the peak season in 2H24. Therefore, it is estimated that the contract price of enterprise SSD in 2Q24 will increase by 20-25%, marking the highest increase across all product lines.

2. Consumer SSD Prices Continue to Increase

At the meantime, there’s news in the consumer SSD market. On a wholesale prices basis, a report from Nikkei on April 2 said that the wholesale price (Bulk transaction price) of benchmark SSD products, TLC 256GB, was around USD 28.5 per unit from January to March, an increase of 12% compared to the previous quarter (October to December 2023).

The price of larger-capacity SSD (512GB) was around USD 53.5 per unit, a 10% increase from the previous quarter. Prices have seen consecutive increases for two quarters, implying an expansion of the growth rate compared to the 9% increase in the previous quarter. SSD wholesale prices are set once every season between memory manufacturers and buyers.

Most buyers show willingness to accept the price hike requests from the memory manufacturers for their sake of profit. According to Nikkei, citing a procurement manager from a certain PC manufacturer, the price increase is understandable given that various memory manufacturers are facing losses.

With an increase in market demand and the production reduction strategies of NAND Flash memory manufacturers since 2Q23, SSD prices begun to climb, experiencing significant increases in a relatively short period.

Regarding the upward trend in SSD prices, Phison Electronics’ Pua, Khein-Seng issued a warning in mid-March, stating that further increases in SSD prices could cause a decrease in demand. NAND Flash memory manufacturers should strive to increase production to meet market demand, rather than pare back production to achieve higher demand than supply.

Phison believes that as essential components for fabricating PCs, if memory device prices become too high, it may disrupt the progress of the PC market recovery in the context of a sluggish global economy, which may lead to a shrinkage in demand once again, and ultimately hinder the development of the NAND Flash memory industry.

Industry Urges Supply to Match SSD Demand

With global tech giants like NVIDIA and Tesla accelerating their expansion in artificial intelligence, market demand for storage devices has surged significantly. Major server companies like Dell Technologies and Hewlett Packard Enterprise (HPE) are competing to purchase SSD. Industry sources indicate that server operators, in order to expand memory capacity, have recently placed urgent orders, and some products are even facing shortages, prompting the manufacturers to consider expanding production.

Considering memory manufacturers’ moves, according to a report from “THE ELEC” in mid-March, Samsung Electronics’ NAND Flash factory in Xi’an, China, has resumed operations at a rate of around 70%. In 2H23, Samsung reduced the plant’s operating rate to 20-30%, marking the lowest point since the decline in memory prices and demand began in late 2022.

NAND Flash leading company Kioxia plans to adjust the production cutbacks strategy started in 2022 and increase output. Kioxia expects the utilization rate of its NAND factories to recover to around 90% by March 2024, depending on demand.

On March 27, Micron announced the groundbreaking of its new packaging and testing plant in Xi’an. The new plant is expected to start production in 2H25, and will gradually go into production in response to market demand.

According to TrendForce’s research on March 19th, against the backdrop of an ongoing increase in NAND Flash price lasting to 2Q24, some suppliers will struggle to reduce losses, lower costs, and return to profitability this year. Starting in March, Kioxia/Western Digital was the first to restore capacity utilization to nearly 90%, while other industry players have not significantly increased production scale.

TrendForce also mentioned that to meet the demand during busy season in 2H24, coupled with Kioxia/Western Digital’s low inventory levels, production expansion this time will mainly focus on 112-layer and some 2D products, which are expected to bear fruit this year and further drive the growth rate of NAND Flash industry supply bit to 10.9% in 2024.

In terms of process, as NAND Flash prices reverse in 2024, supplier inventory levels are gradually decreasing. To maintain long-term cost competitiveness, suppliers embarked on upgrading their processes. Samsung and Micron are the most active. It is estimated that the two companies’ output of processes above 200 layers will account for over 40% by 4Q24.

Kioxia and Western Digital’s production focus in 2024 remains on the 112-layer technology. With support from the Japanese government subsidies, equipment installation for 218-layer technology is expected to begin in 2H24, with more optimistic projections for 218-layer output in 2025.

In light of Kioxia’s current process development plan, products beyond 218 layers will directly advance to processes above 300 layers in hopes of accomplishing better cost structure and regaining a top position in both technology and cost aspects.

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• [News] Low-Price SSDs Disappearing? Three Major Manufacturers Rumored to Increase Prices by 50%

(Photo credit: Samsung)

Samsung Electronics Co. has recently established a HBM team within its memory division, with the goal of enhancing yield during the development of the sixth-generation AI memory HBM4 and the AI accelerator Mach-1.

According to a report of the Korea Economic Daily (KED) citing industry sources on March 29th, Samsung’s HBM team is primarily responsible for the research, development, and sales of DRAM and NAND flash memory. Samsung’s Executive Vice President and Chief of DRAM Product and Technology, Hwang Sang-joon, will lead the new team. This marks the second team focused on HBM since Samsung initiated its HBM task force in January.

Per KED’s report, Samsung is stepping up its efforts in hopes of surpassing SK Hynix, the leader in the advanced HBM field. In 2019, Samsung dissolved its HBM team due to a mistaken belief that the market would not see significant growth.

Per a previous TrendForce press release, the three major original HBM manufacturers held market shares as follows in 2023: SK Hynix and Samsung were both around 46-49%, while Micron stood at roughly 4-6%.

To vie for dominance in the AI chip market, Samsung is pursuing a “two-track” strategy by concurrently developing two cutting-edge memory chips: HBM and Mach-1.

According to TrendForce’s report, SK Hynix led the way with its HBM3e validation in the first quarter, closely followed by Micron, which plans to start distributing its HBM3e products toward the end of the first quarter, in alignment with NVIDIA’s planned H200 deployment by the end of the second quarter.

Samsung, slightly behind in sample submissions, is expected to complete its HBM3e validation by the end of the first quarter, with shipments rolling out in the second quarter.

According to the same report from KED, Samsung is also gearing up to develop the next-generation accelerator, “Mach-2,” tailored for AI inference. According to Kyung on March 29th, Samsung must expedite the development of Mach-2 as there is strong interest from customers in this regard.

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• [News] Memory Manufacturers Vie for HBM3e Market
• [News] Another Semiconductor Giant Makes a Move on HBM

(Photo credit: Samsung)

Recently, South Korean media Alphabiz reported that Samsung may exclusively supply 12-layer HBM3e to NVIDIA.

The report indicates NVIDIA is set to commence large-scale purchases of Samsung Electronics’ 12-layer HBM3e as early as September, who will exclusively provide the 12-layer HBM3e to NVIDIA.

NVIDIA CEO Jensen Huang, as per Alphabiz reported, left his signature “Jensen Approved” on a physical 12-layer HBM3e product from Samsung Electronics at GTC 2024, which seems to suggest NVIDIA’s recognition of Samsung’s HBM3e product.

HBM is characterized by its high bandwidth, high capacity, low latency, and low power consumption. With the surge in artificial intelligence (AI) industry, the acceleration of AI large-scale model applications has driven the continuous growth of demand in high-performance memory market.

According to TrendForce’s data, HBM market value accounted for approximately 8.4% of the overall DRAM industry in 2023, and this percentage is projected to expand to 20.1% by the end of 2024.

Senior Vice President Avril Wu notes that by the end of 2024, the DRAM industry is expected to allocate approximately 250K/m (14%) of total capacity to producing HBM TSV, with an estimated annual supply bit growth of around 260%.

HBM3e: Three Major Original Manufacturers Kick off Fierce Rivalry

Following the debut of the world’s first TSV HBM product in 2014, HBM memory technology has now iterated to HBM3e after nearly 10 years of development.

From the perspective of original manufacturers, competition in the HBM3e market primarily revolves around Micron, SK Hynix, and Samsung. It is reported that these three major manufacturers already provided 8-hi (24GB) samples in late July, mid-August, and early October 2023, respectively. It is worth noting that this year, they have kicked off fierce competition in the HBM3e market by introducing latest products.

On February 27th, Samsung announced the launch of its first 12-layer stacked HBM3e DRAM–HBM3e 12H, which marks Samsung’s largest-capacity HBM product to date, boasting a capacity of up to 36GB. Samsung stated that it has begun offering samples of the HBM3e 12H to customers and anticipates starting mass production in the second half of this year.

In early March, Micron announced that it had commenced mass production of its HBM3e solution. The company stated that the NVIDIA H200 Tensor Core GPU will adopt Micron’s 8-layer stacked HBM3e memory with 24GB capacity and shipments are set to begin in the second quarter of 2024.

On March 19th, SK Hynix announced the successful large-scale production of its new ultra-high-performance memory product, HBM3e, designed for AI applications. This achievement symbolizes the world’s first supply of DRAM’s highest-performance HBM3e in existence to customers.

A previous report from TrendForce has indicated that, starting in 2024, the market’s attention will shift from HBM3 to HBM3e, with expectations for a gradual ramp-up in production through the second half of the year, positioning HBM3e as the new mainstream in the HBM market.

TrendForce reports that SK hynix led the way with its HBM3e validation in the first quarter, closely followed by Micron, which plans to start distributing its HBM3e products toward the end of the first quarter, in alignment with NVIDIA’s planned H200 deployment by the end of the second quarter.

Samsung, slightly behind in sample submissions, is expected to complete its HBM3e validation by the end of the first quarter, with shipments rolling out in the second quarter. With Samsung having already made significant strides in HBM3 and its HBM3e validation expected to be completed soon, the company is poised to significantly narrow the market share gap with SK Hynix by the end of the year, reshaping the competitive dynamics in the HBM market.

Read more

• HBM3 Initially Exclusively Supplied by SK Hynix, Samsung Rallies Fast After AMD Validation, Says TrendForce
• [News] SK Hynix Reportedly Plans to Invest USD 4 Billion in Advanced Packaging Fab in Indiana

(Photo credit: SK Hynix)

SK Hynix is rumored planning to build an advanced packaging fab worth USD 4 billion in West Lafayette, Indiana. According to a report from The Wall Street Journal, it is expected to commence operations by 2028, creating up to 1,000 job opportunities. This initiative may receive support in the form of state and federal tax incentives.

As reported by The Wall Street Journal and Tom’s Hardware, SK Hynix’s investment aims to enhance its capabilities in advanced semiconductor packaging, with a particular emphasis on manufacturing High-Bandwidth Memory (HBM).

Considering a potential capital expenditure of USD 4 billion for the construction, per Tom’s Hardware, if the project proceeds, it will become one of the largest advanced packaging facilities globally. Hence, government support is crucial, with expectations of tax incentives from both state and federal levels in the US.

SK Hynix, a supplier of HBM memory for NVIDIA, is eyeing enhanced capabilities in advanced chip packaging, particularly crucial for manufacturing HBM. The recent NVIDIA Blackwell B200, with each GPU utilizing 8 HBM3e chips, has also underscored SK Hynix’s role in the critical components supply chain for the AI industry.

The recent CHIPS and Science Act allocated USD 8.5 billion to Intel, enhancing US semiconductor competitiveness. SK Hynix’s plan to build a fab in Indiana is a significant stride, fostering US semiconductor growth.

However, US subsidies for chip manufacturing and packaging have been slow, with only three American companies currently benefiting, including BAE Systems, GlobalFoundries, and Microchip Technology.

Reportedly, SK Hynix’s plan remains more of an intention statement than a finalized deal, and whether it proceeds to the construction phase remains to be seen.

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• [News] SK Hynix Reportedly Invests USD 1 Billion in Advanced Packaging to Strengthen HBM Chip Leadership
• [News] SK Hynix Rumored to Propose Collaboration with Kioxia for HBM Production in Japan

(Photo credit: SK Hynix)