TrendForce: Next-Generation Mobile DRAM: LPDDR3 Price to Hit Sweet Spot Next Year

Whether in regards to Wintel-promoted ultrabooks and Windows 8 or Apple’s iPad and iPhone, devices across the board are showing increased demand for improved multimedia quality, operating systems, and cross-platform applications. With better efficiency and performance, quad-core technology is the future for processors. As for mobile DRAM, LPDDR3 has higher bandwidth and efficiency than LPDDR2, the current mainstream, and is favorable for the newest generation of smartphones, tablet PCs, and ultrabooks; Intel’s LPDDR3-supported Haswell platform is expected to arrive next year. According to DRAMeXchange, a research division of TrendForce, once LPDDR3 price finds the market sweet spot, the specification will be able to carve out a piece of the ultrabook memory market. LPDDR3 shipments are forecast to account for 20% of total mobile DRAM shipments in the second half of 2013. As Samsung, SK Hynix, and Elpida begin mass producing LPDDR3, the new product will take over 50% market share in the second half of 2014, becoming the mobile memory market mainstream.

TrendForce provides the following analysis of the LPDDR (4GB) price trend in the past year and a half:

1.    In the fourth quarter of 2010, the LPDDR1 and LPDDR2 price gap still exceeded 30%. Only a few high-end models were equipped with LPDDR2; the majority of devices used LPDDR1.

2.    In the fourth quarter of 2011, the LPDDR and LPDDR2 price gap fell to less than 15%. With the declining price trend, mobile phone manufacturers became more willing to adopt LPDDR2 in their products. Smartphones equipped with LPDDR2 began hitting the market in the first quarter of 2012, at which time the price gap had dropped below 5% and memory makers had successfully reallocated capacity to LPDDR2 production. Economies of scale enabled mobile phone manufacturers to make a full transition to LPDDR2, while controller chip developers provided more products with LPDDR2 platforms. Since the second quarter of 2012, LPDDR2 has replaced LPDDR1 as the smartphone market mainstream.

3.    Once LPDDR3 breaks into the notebook market, the mobile DRAM price competition will heat up as notebooks require more memory than smartphones. Although LPDDR3 has shown impressive power-saving in ultrabooks during both sleep mode and operation, there is still a large price gap between LPDDR3 and DDR3, rendering it highly unlikely that the former will be able to replace the latter in the notebook market anytime soon.
 
4.    As LPDDR3 is still in the beginning stages of production, TrendForce expects only a few high-end smartphones and notebooks with the advanced specification will be produced, and on a small scale. Without large-scale production and requiring further yield rate improvement, it will be difficult for LPDDR3 price to meet market expectation in the next quarter or two. At a conservative estimate, LPDDR3 price will not hit the market sweet spot for another three to five quarters at the earliest.

However, high demand will help lower LPDDR3 price, as the future will see ultrabooks and tablet PCs, not just smartphones, adopting LPDDR3. As the improved specification has wider application and higher demand than LPDDR2, TrendForce expects LPDDR3 price will decline at a faster rate than LPDDR price did. Furthermore, memory makers’ willingness to invest in LPDDR3 development will affect the rate of cost optimization, a key factor in the promotion of LPDDR3 to the market mainstream. At present, Samsung and SK Hynix already have product samples ready for testing, while Elpida will ramp up LPDDR3 production after the company’s restructuring. With three global DRAM manufacturers investing in LPDDR3, the specification is expected to take 50% market share in the second half of 2014, becoming the standard for thin and light mobile products.