Despite facing economic challenges and the impact of high inflation, the flash memory market finds itself in a challenging period. Nevertheless, major DRAM manufacturers continue the pursuit of advanced technology.

For DRAM chips, advanced manufacturing processes mean improved energy efficiency, increased capacity, and an enhanced end-user experience. Currently, in the world of advanced DRAM processes, such as the 10nm class, has reached the fifth generation. Micron refers to it as 1β DRAM, while Samsung calls it 1b DRAM.

Since Micron commenced production of 1β DRAM last October, they have set their sights on producing 1γ DRAM by 2025. This will mark Micron’s first foray into extreme ultraviolet (EUV) lithography technology, and for now, EUV production is centered in their Taichung facility in Taiwan. Therefore, the 1γ process is expected to kick off production there, with potential expansion to their Japanese facilities in the future. Samsung, on the other hand, plans to enter the 1bnm process stage in 2023, achieving chip capacities ranging from 24Gb (3GB) to 32Gb (4GB) and native speeds of 6.4 to 7.2Gbps.

In the NAND Flash business, the technology has now exceeded the remarkable milestone of 200-layer stacking, with storage manufacturers relentlessly striving for even higher layer counts. On August 9th, SK Hynix showcased the world’s first 321-layer NAND Flash memory sample during the 2023 Flash Memory Summit. This innovation has increased efficiency by 59% compared to the previous 238-layer 512Gb NAND. SK Hynix plans to further refine the 321-layer NAND Flash and intends to commence production in the first half of 2025.

Furthermore, Micron has ambitious plans beyond 232 layers, with products like 2YY, 3XX, and 4XX on the horizon. Kioxia and Western Digital are also actively exploring 3D NAND technology with more than 300, 400, and 500 layers. Samsung is planning to introduce the ninth generation of 3D NAND in 2024, possibly featuring 280 layers, followed by the tenth generation in 2025-2026, potentially reaching 430 layers. Their ultimate goal is to achieve 1000-layer NAND Flash by 2030.

(Image: SK Hynix)

Report to Voice, After the release of the Huawei Mate 60 Pro, various components have begun to experience the long-lost sensation of surging demand, replenishment, and stockpiling. With the launch of the Apple iPhone 15, the once sluggish global consumer electronics market has suddenly come back to life. The current mindset among storage manufacturers is clear: regardless of whether there is a real or perceived shortage, the goal before the year-end is to raise prices until they are no longer incurring losses.

Leading storage giants have gone through a series of price drops, losses, and production reductions, and are now officially entering the “price hike” phase. Samsung, SK Hynix, Micron, and others have already expressed their intention to raise NAND Flash contract prices.

According to TrendForce latest price projection on NAND Flash, in response to persistent softening in demand, Samsung has taken a decisive step: a sweeping 50% production cut from September, with the focus mainly on processes under 128 layers. Other suppliers are also expected to follow suit and increase their production cutbacks in the fourth quarter to accelerate inventory reduction. With this maneuver in play, Q4 NAND Flash average prices are projected to either hold firm or witness a mild surge, possibly in the ballpark of 0~5%.

YMTC now is facing surging demand from both smartphone and module manufacturers. It is reported that the production capacity for the period up to 1H24 has already been fully booked, with PC and server manufacturers sharing the capacity, while module manufacturers may receive a smaller share.

The current NAND Flash market situation is such that trying to negotiate increased supply with NAND Flash manufacturers like Samsung, Micron, and YMTC may yield little new capacity, and accepting higher prices may be inevitable.

The sudden pre-sale launch of the Huawei Mate 60 Pro has undoubtedly acted as a major catalyst for the current smartphone market. Without it, many smartphone supply chain companies believed that the smartphone market wouldn’t recover until the second half of 2024, and the most pessimistic among them even doubted if it would improve by 2024. The release of the Huawei Mate 60 Pro and the Apple iPhone 15 has injected a long-awaited warmth into the global smartphone market, reinvigorating the entire smartphone component supply chain.

In recent times, the top-tier iPhone 15 Pro Max from Apple’s iPhone 15 series is expected to be available only in November, which some interpret as a sign of strong demand. However, it is more likely due to production bottlenecks, particularly related to technologies like CIS, which have resulted in limited shipments of the iPhone 15 Pro Max. Overall, the estimated shipment volume for the iPhone 15 series may still reach up to 80 million units.

Is this resurgence in smartphone demand a lasting trend with increased consumer willingness to upgrade, or is it a temporary phenomenon? Optimists and conservatives hold differing views, but what is certain is that the global smartphone shipment volume has entered a mature phase, with limited room for significant growth driven solely by new features. However, the storage capacity in each smartphone continues to increase, providing substantial opportunities for existing supply chain manufacturers.

While new opportunities like automotive and AI have emerged, there is still no demand in any new field that can entirely replace the massive smartphone market. Therefore, the consensus within the global tech industry is that for the economy to rebound, the consumer electronics sector, particularly smartphones, is indispensable at this stage. AI and electric vehicles alone cannot take the place of smartphones. (Image credit: YMTC)

(Source: https://mp.weixin.qq.com/s/cb0kRUpWU6MElLNh9CR9eA)

Due to factors such as high inflation, sluggish demand in the consumer electronics sector, and other influences, the memory market has experienced a downturn. Major manufacturers like Kioxia and Micron began reducing capacity in the fourth quarter of the previous year, and in 2023, Samsung announced its entry into the production reduction trend. However, as market demand continues to weaken, the memory market in 2023 has yet to show signs of recovery, with prices continuing to decline and manufacturers facing operational pressure.

In this context, some memory manufacturers are hoping to stabilize prices and rebalance market supply and demand by continuing to reduce production.

According to reports from Taiwan’s media The Commercial Times,” DRAM manufacturer Nanya Technology is following the footsteps of major players by adjusting production capacity, lowering utilization rates, flexibly adjusting product portfolios and capex, and dynamically adapting to customer demands and market changes to cope with the weak market conditions. It is expected that production capacity will be adjusted dynamically, with reductions of up to 20%.

Previously, TrendForce’s research showed that due to DRAM suppliers initiating production cuts one after another, overall DRAM supply bits have decreased quarter by quarter. Coupled with seasonal demand support, this has eased the pressure on supplier inventories. It is expected that the price decline in the third quarter for DRAM will converge to around 0-5%. However, due to the fact that supplier inventories remain high throughout the year, there is still significant pressure for DRAM prices to bottom out and rebound, with the actual stabilization and recovery likely to occur in 2024.

As for NAND Flash, recent surveys by TrendForce indicate that, in response to the continued weakening demand, Samsung has announced an increase in production cuts starting from September, with reductions mainly focused on processes below 128 layers. Other suppliers are expected to follow suit and expand production cuts in the fourth quarter to accelerate inventory reduction.

As NAND Flash manufacturers expand their production cut efforts, TrendForce estimates that NAND Flash prices in the fourth quarter are expected to remain stable or see a slight increase, with an estimated increase of approximately 0-5%. However, if the upward trend in NAND Flash prices is to continue into 2024, it will still rely on sustained production reductions, as well as the observation of whether Enterprise SSD purchase orders will see a significant resurgence.

(Photo credit: Micron)

According to Taiwan’s TechNews report, Lu Donghui, Chairman of Micron Technology Taiwan, stated that in response to the growing demand in the AI market, Micron Technology Taiwan will continue to invest in advanced processes and packaging technologies to produce High Bandwidth Memory (HBM) products. Micron Technology Taiwan is the only Micron facility globally with advanced packaging capabilities.

Lu Donghui, speaking at a media event, mentioned that Micron had previously introduced the industry’s first 8-layer stack (8-High) 24GB HBM3 Gen 2 product, which is now in the sampling phase. This product boasts a bandwidth exceeding 1.2TB/s and a transmission rate exceeding 9.2Gb/s, which is 50% higher than other HBM3 solutions on the market. Micron’s HBM3 Gen 2 product offers 2.5 times better energy efficiency per watt compared to previous generations, making it ideal for high-performance AI applications.

Micron’s HBM3 Gen 2 memory products are manufactured using the most advanced 1-beta process technology in Taiwan and Japan. Compared to the previous 1-alpha process, the 1-beta process reduces power consumption by approximately 15% and increases bit density by over 35%, with each chip offering a capacity of up to 16Gb. Through Micron’s advanced packaging technology, the 1-beta process memory chips are stacked in 8 layers, and the complete HBM3 Gen 2 chips are packaged and sent to customers’ specified semiconductor foundries like TSMC, Intel, Samsung, or third-party packaging and testing facilities for GPUs, CPUs.

Lu Donghui highlighted that Taiwan’s robust semiconductor manufacturing ecosystem makes it the exclusive hub for Micron’s advanced packaging development worldwide. By combining this ecosystem with Micron’s offerings, they can provide customers with comprehensive solutions to meet market demands. While HBM products represent a relatively small portion of the overall memory market, their future growth potential is significant, with expectations to capture around 10% of the entire memory market in the short term.

(Photo credit: Micron)

According to the Korea Economic Daily. Samsung Electronics’ HBM3 and packaging services have passed AMD’s quality tests. The upcoming Instinct MI300 series AI chips from AMD are planned to incorporate Samsung’s HBM3 and packaging services. These chips, which combine central processing units (CPUs), graphics processing units (GPUs), and HBM3, are expected to be released in the fourth quarter of this year.

Samsung is noted as the sole provider capable of offering advanced packaging solutions and HBM products simultaneously. Originally considering TSMC’s advanced packaging services, AMD had to alter its plans due to capacity constraints.

The surge in demand for high-performance GPUs within the AI landscape benefits not only GPU manufacturers like NVIDIA and AMD, but also propels the development of HBM and advanced packaging.

In the backdrop of the AI trend, AIGC model training and inference require the deployment of AI servers. These servers typically require mid-to-high-end GPUs, with HBM penetration nearing 100% among these GPUs.

Presently, Samsung, SK Hynix, and Micron are the primary HBM manufacturers. According to the latest research by TrendForce, driven by the expansion efforts of these original manufacturers, the estimated annual growth rate of HBM supply in 2024 is projected to reach 105%.

In terms of competitive dynamics, SK Hynix leads with its HBM3 products, serving as the primary supplier for NVIDIA’s Server GPUs. Samsung, on the other hand, focuses on fulfilling orders from other cloud service providers. With added orders from customers, the gap in market share between Samsung and SK Hynix is expected to narrow significantly this year. The estimated HBM market share for both companies is about 95% for 2023 to 2024. However, variations in customer composition might lead to sequential variations in bit shipments.

In the realm of advanced packaging capacity, TSMC’s CoWoS packaging technology dominates as the main choice for AI server chip suppliers. Amidst strong demand for high-end AI chips and HBM, TrendForce estimates that TSMC’s CoWoS monthly capacity could reach 12K by the end of 2023.

With strong demand driven by NVIDIA’s A100 and H100 AI Server requirements, demand for CoWoS capacity is expected to rise by nearly 50% compared to the beginning of the year. Coupled with the growth in high-end AI chip demand from companies like AMD and Google, the latter half of the year could experience tighter CoWoS capacity. This robust demand is expected to continue into 2024, potentially leading to a 30-40% increase in advanced packaging capacity, contingent on equipment readiness.

(Photo credit: Samsung)