TrendForce Reports Steady Smartphone Shipments Resulted in Just 1% Drop in Global Mobile DRAM Revenue for 4Q15

DRAMeXchange, a division of global research firm TrendForce, reports that the decline in mobile DRAM prices eased in the fourth quarter of 2015. By comparison, PC DRAM suffered a 16% quarterly price decline during the same period. Since the second half of 2015 was the traditional strong season for smartphone shipments, the mobile DRAM industry saw its global revenue fell by a mere 1% in the final quarter.

Among the top three suppliers, Samsung led in the fourth-quarter revenue ranking with a 1.3% increase. SK Hynix came in second place with a slight revenue drop of 2.1% over the prior quarter. The No. 3 supplier Micron had the largest quarterly revenue decline of 7.7%. According to Avril Wu, research director at DRAMeXchange, the top three suppliers’ mobile DRAM revenue figures are closely tied to the amount of orders they each received from Apple. Samsung has been ahead of its competitors in the development of LPDDR4 technology by at least half a year, so the company was able gain most of Apple’s orders as the first-choice supplier. SK Hynix had the second-largest share of Apple’s orders as it continue to produce mobile DRAM on the 25nm process. Micron’s products did not pass Apple’s sample qualification the third quarter and thus missed out on supplying the iPhone 6s. This delay was clearly reflected in the U.S. memory maker’s fourth-quarter mobile DRAM revenue.

As for market share, Samsung expanded to about 58.2%, while SK Hynix and Micron saw their shares contracted to 26.1% and 14.3%, respectively. Looking ahead to the first quarter of 2016, the smartphone market is going to be negatively affected by the seasonal pattern and the slowing global economy. Even successful brands such as Apple is expected to experience a quarterly shipment decline of around 30%. Based on DRAMeXchange’s first-quarter estimates, global smartphone shipments are projected to fall by 16% from the prior quarter, and this will result in a quarterly drop in mobile DRAM prices by more than 7%.

LPDDR4 to account for 45% of the mobile DRAM market in 2016 and memory for high-end smartphone will start from 4GB

DRAMeXchange expects LPDDR4’s market share to expand rapidly, from 18.2% in 2015 to 45% this year. “Only iPhone 6s and a few high-end Android devices came with LPDDR4 last year,” said Wu. “The situation is going to be radically different this year, with LPDDR4 being supported by Qualcomm Snapdragon 820 processor and adopted by all high-end Android models.” The memory density of high-end Android phones will start at 4GB, and some may even have 6GB. Also, the 5.5-inch model of the upcoming iPhone (or “iPhone 7”) will be upgraded to carry 3GB. The rise in smartphone’s memory density will thus help drive the overall mobile memory consumption.

The market share of LPDDR3 this year is expected to be neck-and-neck with LPDDR4 at 46.8%. Mid-range smartphones will still mainly use LPDDR3, and their memory density will increase from 2GB to 3GB. Most low-range devices on the other hand will be locked in 2GB LPDDR3 as to create more pronounced differentiation in the market.

With regards to the development of mobile DRAM manufacturing, Wu noted that Samsung is focusing on making LPDDR4 the market mainstream this year and has advanced to the 18nm technology. Currently, clients that have verified Samsung’s 18nm 12Gb mono-die products include Xiaomi, OPPO and Vivo. SK Hynix will be migrating from the 25nm to the 21nm technology this year, but the mass production for the 21nm process will come about later in the year’s second half. The memory maker needs time to improve the 21nm yield rate. Micron’s goals for 2016 are producing its main mobile DRAM products on the 20nm process and increasing the LPDDR4’s production ratio. In the hope of catching up to the South Korean suppliers, Micron also plans to do 16nm trial production in the first half of the year.