Core cycle ｜ Excessive memory chip is worried about heating up Samsung SK in July or leading a new round of price reduction

Jiang Yue, a reporter from Southern Finance and Economics, reported that in recent years, the global supply and demand balance of chips has been greatly concerned by the market. Since 2022, chip issues have shifted from shortage to excess, and the cycle "changing seasons" is faster than many people think. Since the end of 2020, the price increase cycle of memory chips has continued for more than 18 months, but it has been weak in July. Market news pointed out that the "first shot" that may be reduced by the global memory chip oligraphy, SK Hynix, Micron, etc., may be reduced by about 10%compared with the second quarter.

Memory chips are one of the most obvious chip commodities in the periodic. Where does this round of price cut point to? What factors have caused imbalances for supply and demand? Compared with previous semiconductor cycles, which new factors are worth paying attention to?

Market analysts pointed out to a reporter from Southern Finance and Economics that they need to pay attention to the impact of the price of DDR5 accelerated penetration on the price of inventory chips. In addition, many factors have caused memory chips to usher in a weak situation in the third quarter.

However, looking forward to the final direction of memory chips in 2022, there are still many optimistic factions in the market. According to market analysis, new areas other than consumer electronics are forming an important market, and it is expected to support the price of memory chips in the future. Among them, cloud services will take the lead in "running", and the car market will become one of the most important driving factors for the upgrading of memory technology.

DRAM ushered in the first wave of price reductions

Since July, a number of market institutions that have tracked the price of memory chips for a long time have pointed out that DRAM will usher in price reductions. "In the third quarter, DRAM's price may fall nearly 10%by quarter." TrendForce Ji State Consultation said in a report on July 4. This reflects that it has maintained a rising market for 18 months, and finally came to the "inflection point".

DRAM refers to dynamic random access to memory, which is the most mainstream memory chip type today. This storage chip is very popular in 2021. Market consulting agency IC Insights said that in 2021, the global DRAM market sales increased by 42%to $ 96.1 billion compared with 2020. This growth rate reflects the "volume and price rise" of the year. The average sales price of DRAM units rose from US $ 3.51 in 2020 to $ 4.3, an increase of 22.5%. At the same time, shipments also increased significantly year -on -year.

The long -term price increase has caused the market to disturb the market. Since the end of 2021, some people have predicted that the DRAM market has been weak. However, in the first half of 2022, the market maintained a stable situation.

"In the first half of this year, the consumption demand of the overall electronic product was rapidly weaker, but the original DRAM original bargaining was strong, and there was no sign of selling prices." TrendForce Juanbang Consulting analyst Wu Yating explained to the South Financial all -media reporter.

Under the strong seller's price, DRAM's "big factory" performance was maintained. Micron, one of the three major memory chip factories in the world, has continuously handed over a satisfactory answer sheet during the two quarters of this year. In the quarter from December 2021 to February this year, the company's quarterly revenue increased by 25%year -on -year, and in the next quarter, total revenue increased by 16.4%year -on -year. The company emphasized that DRAM prices remained stable during the period.

In any case, after entering July, DRAM's supply and demand is difficult to maintain balance. "The demand for the second half of the year is unknown, and some DRAM suppliers have begun to have a clear price reduction intention." Wu Yating told reporters that she expects that in the server field with relatively stable demand, DRAM "big factory" will seek "destocking".

Micron's performance forecast for the second half of the year has also become "pessimistic", pointing out that the total company revenue of the company in June to August is about 7.2 billion US dollars, which is about 21%lower than the market expectations. Because DRAM accounts for more than 70 % of the total income of Micron, Micron's "pessimistic" expectations suggest DRAM's price reduction.

The DRAM market is an oligopoly monopoly market. Micron and South Korea's Samsung and South Korea SK Hynix "three -pointers world" occupy about 94%of the market share. In Taiwan, China, South Asia, and Winbon Electronics, a subsidiary of Formosa Plastics Group, are also important DRAM producers supplying globally.

The price reduction in the oligopoly market is usually a "consensus" price reduction, which is very easy to lead other small market participants to follow the price reduction. "If the original factory competes for prices to reduce prices, the price reduction in DRAM in the third quarter may exceed 10%." Wu Yating said.

Inquiry cause of memory chip price reduction

DRAM chip reduction is usually caused by the shrinking of electronic products, but the driving factor of the price reduction in this round is not only there. Market sources analyzed the reporters of the Southern Finance Media that the buyers' sufficient inventory, the shrinking of electronic products, and the exacerbation of advanced process chips have been pushed together to promote the imbalance of DRAM supply and demand in this round.

Memory chip is a memory that is embedded in electronic products for temporary storage data, and is used in data centers, PCs, mobile phones, etc. Wu Yating told reporters that the data center and PC application end have sufficient DRAM inventory in mid -2022. The average inventory of major PC OEMs exceeds two months, and the data center inventory is about 7 to 8 weeks. This reflects that if the DRAM seller cannot give an attractive price reduction space, the customer will not have an urgent willingness to buy.

Secondly, the consumption of electronic products is cooling. On June 30, the market consulting agency Gartner issued a report saying that global PC shipments in 2022 will drop by 9.5%. This reflects that global PC sales have come to the cooling point of cooling. Inquiry about the past market data. As of the first quarter of this year, Global PC sales have gone through a period of seven consecutive quarters of sales explosion, and more than 80 million units were shipped every quarter. However, Gartner believes that PC consumption willingness will be reduced under the difficulty of geopolitical turmoil, high inflation, currency fluctuations and supply chains in 2022.

"In fact, the home office and remote study that have been started in 2020 has released PC purchase willingness to be released in advance." A person close to the three major DRAM producers in the world has also analyzed the current market market with all media reporters in Southern Finance.

In addition, Gartner also pointed out that the shipments of tablet and mobile phones in 2022 will also decrease by 9%and 7.1%year -on -year. PCs, tablets and mobile phones constitute more than half of DRAM demand. It can be seen that related consumption atrophy will simultaneously crack down on DRAM demand.

Another DRAM market influencing factor is also forcing the price of storage chip vendors to reduce prices, that is, the "backward" crisis of the old process.

Wu Yating told reporters that in the third quarter, the advanced process of 1Z and 1-ALPHA was constantly increasing market penetration. This reflects that the memory of the old process needs to be accelerated.

The process is the process level. The advanced process will improve the performance of DRAM in various aspects such as density, power consumption and performance, and prompt consumers to upgrade. The 1Z process and the 1-Alpha process were put into large-scale production in 2020 and 2021, respectively, and are still increasing market penetration rates. If the old process inventory cannot be digested in time before 1Z and 1-Alpha products enter the market, the old process inventory may face a more "cliff-type" price drop.

According to the data of Yole Developpement, the total market share of 1Z and 1-Alpha in the first quarter of 2022 was less than 40%, but it may reach nearly 80%in the fourth quarter of 2023.

Future -oriented driving force

DRAM's historical price fluctuations are astounding. In order to avoid dependence on single electronic terminal products, DRAM manufacturers also need to find future demand driving force. Market analysis believes that cloud and cars have huge DRAM demand potential.

The consumption of PC and mobile phones deeply depicts the "cool and hot" trend chart of the DRAM market in history. In 2017, PCs and mobile phones entered the consumer "bull market". The fourth -generation double data rate (DDR4) price of the year rose. Since the fourth quarter of 2018, PC and mobile phones have entered the consumption "bear market", and memory prices fell cliffs. The price of the above DRAM products in June 2020 even fell below $ 2 in the spot market.

Nevertheless, cloud and cars are increasing DRAM consumption, which may provide more stable demand for the DRAM market.

Wu Yaling told reporters that the servers needed by the current cloud business account for about 35%of the overall DRAM demand, and this share is still growing year by year. Not only that, this is also conducive to DRAM's stability, because the server DRAM has higher requirements for performance, power consumption and reliability. "In the long run, the unit price (ASP/BIT) of the server DRAM will be relatively high." Wu Yating said.

Talking about DRAM for cars, Wu Ya pointed out that the current demand for DRAM in the car is relatively variable and diversified. "This is because the type of car level is large and the use function is different." The calculated DRAMs are purchased by the car market.

The market penetration of autonomous driving software and auxiliary driving software is an important source of DRAM demand for vehicles. A person close to the three major DRAM manufacturers in the world told reporters that he believes that cars are DRAM's "the strongest growth market in the next ten years." "Data processing of driving vehicles requires timely and fast in time, and the capacity is very large." He said, "For example, the code data operation of the code operating by a assisted driving system is comparable to the data center calculation."

Not only that, the car chip will also promote DRAM to continue to seek technological progress. The above -mentioned industry insiders said: "The vehicle chip requires high safety and durability. With up to ten years of usage cycle, DRAM will also put forward the highest technical requirements." At present, DRAM manufacturers, including Micron, have been The latest LPDDR5 DRAM is pushed to the automotive market.

Wu Yating pointed out that the current car is only 2%to 3%in DRAM demand. She also believes that the market penetration of high -level autonomous driving/auxiliary driving software tools will be the main driving force for the DRAM demand for vehicles. However, Wu Yating believes that this will take years, which means that the DRAM market will first seek a breakthrough in order in emerging fields such as cloud servers.

- END -