Memory is an important branch of the semiconductor industry. After the continuous decline in 2015 and 2016, the global memory market ushered in an explosion in 2017, with a growth rate of 60% and sales exceeding 120 billion US dollars, accounting for 30.1% of the total value of the global semiconductor market.
Among them, due to insufficient supply, the price of DRAM (per Gb) increased by 47% in 2017, and the market scale reached 72.2 billion US dollars, an increase of 74% compared with 2016, and it continued to maintain the first market share in the field of semiconductor memory (ahead of NAND Flash, etc.).
In this issue of intelligent internal reference, we recommend the DRAM industry research report from Northeast Securities. Starting from the market demand and competition pattern, we will take stock of the development trend of the industrial chain and the possible changes in the supply pattern brought about by the release of domestic production capacity.
The following is the dry goods presented by intelligent internal reference finishing:
▲ Proportion of branch sales of semiconductor products
The main function of memory is to store programs and all kinds of data, and it can automatically access programs or data at high speed during the operation of the computer. It is a device with "memory" function.
According to the report of the World Semiconductor Trade Statistics Association, in 2017, memory sales reached a record high, exceeding $120 billion, accounting for 30.1% of the total value of the global semiconductor market. The main reason is that DRAM (the most common system memory) and NAND Flash will start from the second half of 2016.Out of stock and cause price increase.
▲ Classification of memory
▲ semiconductor memory market classification
In 2017, the average selling price of DRAM increased by 77% year-on-year, and the total sales value reached 72 billion US dollars, up by 74% year-on-year; The average selling price of NAND Flash increased by 38% year-on-year, and the total sales reached 49.8 billion US dollars, up by 44% year-on-year. NOR Flash is $4.3 billion.
▲DRAM price change trend
The sharp rise in the prices of the three major memories led to a 58% increase in the global memory market.For the first time, memory has surpassed the largest proportion of logic circuits over the years and become the branch with the highest proportion of sales in the global semiconductor market., occupies an extremely important position in the industry.
▲ Global distribution of semiconductor products
From the perspective of regional distribution of global markets, Asia-Pacific and other regions accounted for 60.6% in 2017, up 18.9% year-on-year; North America accounted for 21.2%, up 31.9% year-on-year; The market share of semiconductor products in Europe was 9.3%, a year-on-year increase of 16.3%; The market share of Japanese semiconductor products was 8.9%, up 12.6% year-on-year.
Northeast Securities pointed out that there are two main reasons why the Asia-Pacific region has become the world’s largest semiconductor consumer market: First, the proportion of China products in the Asia-Pacific region has increased year by year, and the proportion in 2016 reached a record high of 92.4%; Second, the product scale of China has increased year by year, and the growth rate has been higher than the overall level of the Asia-Pacific region and other regions for several consecutive years, which has effectively boosted the growth of the entire Asia-Pacific region.
▲ Comparison between China and Asia Pacific and other regions
From the perspective of market scale, the most mainstream memories at present are DRAM, NAND Flash and NOR Flash, especially the first two, which account for about 95% of all semiconductor memories.
▲ Performance comparison of mainstream memory
In some fields, new types of memory have emerged. From the current results, RRAM has the advantages of large capacity, high speed (reading and writing time < 10ns) and low energy consumption. Compared with other new storage technologies, it is compatible with CMOS technology and is considered as a possible choice to replace RAM.
However, considering the serious device-level variability of the new memory, andDRAM has high cost performance, mature technology and scale advantage, and it is expected that it will be difficult to be replaced in the next 5-10 years.
▲SDRAM performance comparison
As an upgrade of DRAM, SDRAM (Synchronous Dynamic Random Access Memory) has gradually become the standard memory configuration of PC.
SDRAM uses a single system clock to synchronize all address data and control signals by adding synchronization control logic to the existing standard dynamic memory. Using SDRAM can not only improve the system performance, but also simplify the design and provide high-speed data transmission. At present, SDRAM has gone through five generations from its development to now, and it has realized dual-channel four-time synchronous dynamic random access memory.
▲ The world’s smallest DRAM chip
From the point of view of process technology, DRAM memory has entered the 10nm stage.
At present, Samsung has adopted the 20nm process on a large scale and took the lead in mass production of the 18nm process; SK Hynix is mainly based on 25nm process, and has introduced 21nm process; At present, Meguiar’s process is mainly 30nm, and the 20nm process has entered the stage of improving yield.
By the end of 2017, Samsung has developed the world’s smallest dynamic random access memory (DRAM) chip, and adopted a 10nm process to continue to expand its technological lead over competitors. At the same time, it will convert most existing DRAM production into 10nm chips in 2018.
▲ Comparison between ▲3D DRAM and 2D DRAM
In packaging, 3D DRAM technology is on the rise.
Because the planar miniaturization of DRAM is approaching the limit step by step and expanding to the vertical direction, after 18/16nm, it is no longer advantageous in cost and performance to continue to reduce the size in two dimensions because of the inability to continue to reduce the film thickness and the unsuitability of using high dielectric constant materials and electrodes.
3D DRAM technology, or 3D packaging, uses TSV to stack multiple chips together, which can realize high-density capacity in a loose size and reduce parasitic resistance-capacitance and delay crosstalk. With the improvement of electronic products’ requirements for DRAM capacity and performance, the proportion of 3D DRAM will show an upward trend in the future.
▲ Market share of ▲DRAM manufacturers
The soaring price of DRAM drove the global semiconductor output value to exceed 400 billion US dollars in 2017. Judging from the current global market share of DRAM, Samsung, SK Hynix and Micron are the three giants in the market, and these three have recently been accused of manipulating DRAM prices in the United States.
According to the data released by IHS Markit, in the third quarter of 2017, Samsung (44.5%) and SK Hynix (27.9%), two giants in the Korean semiconductor industry, accounted for 72.4% of the global DRAM market, followed by Micron Technology (22.9%), nanya technology (2.2%) and Winbond Electronics (0.8%).
▲ Samsung DRAM capacity change
From the current technological development, South Korea’s Samsung Electronics is still ahead of competitors such as SK Hynix and Micron. In addition to actively expanding the output of memory, developing advanced process (second generation 10nm 8Gb DDR4), accelerating the development plan of its next generation DRAM chip and system, and ensuring its leading position in the market, Samsung is also actively developing the foundry business of wafers, which is regarded as a new growth power in the semiconductor field.
▲SK Hynix’s revenue ratio
SK Hynix benefited from the strong demand in the global server market and the rising price of mobile products, and the Q4 market performed well in 2017. In the future, SK Hynix will meet the growing market demand by introducing new technologies and processes into servers and SSD products, and will expand the capacity of 1xnm DRAM and apply it to PC, mobile devices and server products.
▲SK Hynix and Micron DRAM revenue ratio
In terms of Micron Technology, considering that the memory market is better than expected, the revenue target for Q2 in 2018 will be raised from the original 6.8 billion to 7.2 billion dollars to 7.35 billion dollars. In addition, Micron plans to use advanced technological advantages to reduce costs and strengthen its competitiveness in the market. It is expected that 1xnm DRAM products will be provided by the end of 2018.
▲ Chip quantity forecast in 2017-2018
From the supply side, the capacity growth of DRAM is limited, and Moore’s Law will slow down.
At present, Samsung and SK Hynix, two major Korean manufacturers, are stepping on the accelerator in the pace of expanding production, including Samsung’s P1 plant and Line 15 production line in Pyeongtaek, South Korea, and SK Hynix’s M14 production line. At the same time, Meguiar’s Fab 15 and Fab 16 in Hiroshima also have plans to expand DRAM production, but the increase in production capacity still mainly depends on two Korean manufacturers.
According to the latest factory scale of the three companies, the global chip production capacity in 2017 is about 1100K K. DRAMeXchange predicts that by 2018, Samsung and SK Hynix will increase their production capacity by about 20%, and Micron’s production capacity will increase by 10%. It is estimated that the global chip production capacity will be around 1200K every quarter.
▲DRAM manufacturer’s process progress
The main reason for the slowdown in the growth rate of DRAM production capacity is that the yield of DRAM can not be effectively controlled as the process size becomes smaller and smaller. At the same time, the annual production capacity of EUV lithography equipment is extremely limited, which makes it difficult for DRAM process nodes to break through, and the process schedules of various manufacturers are forced to be postponed again and again. Coupled with the seller’s leading DRAM market and the emergence of new non-volatile memory technology, it has further caused the global DRAM leading enterprises to upgrade their technology and reduce their willingness to expand production.
On the demand side, the structural growth of mobile terminals, servers and PCs in the three major markets of DRAM still exists. At the same time, 5G commercial nodes are getting closer and closer, which will drive demand to accelerate.
▲ Market share of global and domestic mobile phone manufacturers
In terms of mobile terminals, the average storage capacity of DRAM in mobile phones is maintained at an annual growth rate of 10%-20%. Combined with the growth of the mobile phone market (the stable replacement cycle of 1.5 billion units per year), it is estimated that the demand for DRAM in mobile terminals will increase by 18.7% in 2018, and it will continue to concentrate on domestic machine brands.
The commercialization of 5G is just around the corner in 2020. In the future, the development of cloud computing and IDC will require massive data storage. Therefore, the server will have a long-term growth driving force in terms of system shipment and single system DRAM capacity improvement. It is estimated that the growth rate of server demand for DRAM will be 26.1% in 2018 (the growth rate of shipments is 2.9%, and the capacity of a single system is expected to increase to 184GB), which will become the fastest growing product type.
The PC market remains stable, and the demand for DRAM will also maintain a relatively stable and small growth trend. It is estimated that the market growth rate in the PC field will be 6.6% in 2018.
▲DRAM price change trend
In general,The expansion of DRAM is trapped by technical bottlenecks and the monopoly of international manufacturers.In 2018-2020, the global bit growth will continue to hover at the historical low level of around 20%. However, the market demand for downstream terminal applications will continue to rise moderately, especially the terminal brands will continue to concentrate on domestic brands, resulting inThe demand of domestic mobile phones for DRAM products has increased regionally.At the same time, 5G, cloud computing, IDC, etc. will drive the server application to grow substantially.
Northeast Securities Judgment:From 2018 to 2020, DRAM products will be in a continuous price increase cycle.. It should be pointed out that most of the mainland DRAM production capacity will start mass production after 2019, and if the process goes smoothly, it will be possible to alleviate the supply and demand gap of DRAM.
▲IDM mode
Different from the vertical division of labor mode, the memory industry basically adopts IDM mode, that is, it has its own wafer manufacturing plant and packaging and testing plant, which realizes the advantage of internal integration of resources and has a high profit rate. The core elements of competition in memory industry are manufacturing technology and scale effect.
Limited by the wafer size, domestic manufacturers have been in the blank in the field of DRAM, but it is expected to achieve a breakthrough in 2018.
In terms of equipment, due to the high-end technical barriers, domestic manufacturers choose to start from the low end. At present, they have the manufacturing capacity of some core equipment, such as mask aligner, ion implanter, CMP, ECD and other equipment.
▲ Domestic manufacturer DRAM is under construction.
At present, domestic DRAM manufacturers have formed two camps: Fujian Jinhua and Hefei Changxin. Among them, Fujian Jinhua is a 32nm DRAM niche product, focusing on the consumer electronics market; Hefei Changxin is a 19nm DRAM, focusing on mobile memory products, and will realize trial production and open production lines before the end of 2018. In addition, Changjiang Storage and Zhaoyi Innovation also laid out DRAM.
▲2010-2018 DRAM product share and forecast: It is estimated that by 2018, the consumption share of mobile terminals and servers will continue to increase, and PC consumption will continue to decline, reaching the lowest point in history.
Northeast Securities pointed out that the next few years will be the key period for the success of memory research and development because domestic manufacturers are still in the initial stage. After successful research and development, there are still some uncertainties about whether the yield can be raised to a higher level, whether the cost control can meet expectations, and whether the intellectual property rights can be effectively protected. It still takes several years from successful research and development to mass production and sales.
Therefore, it is expected that the domestic production capacity under construction will be gradually released, but with the continuous release of domestic production capacity under construction and the continuous maturity of the national memory industry, it is expected to gradually change the current industrial structure and play a positive role in promoting the development of the global DRAM industry.
Wisdom thinksAt the critical period of semiconductor development in mainland China, DRAM, as an important industrial branch with high cost performance, mature technology and scale advantage, will enter a period of development opportunities under the strong demand of domestic terminals, and some analysts say that next year will be the first year of memory development in China. At that time, faced with the monopoly pressure of the Big Three, as well as the challenges of R&D and production, whether local manufacturers can break through depends not only on their own efforts, but also on policies, capital, industry and market environment.
