Market Monitor

DRAM Market Monitor

By Yole Intelligence — Mar 2023

The DRAM Market Monitor is your guide to the volatile DRAM market and includes historical and forecast data covering pricing, supply data, demand by end-market, plus much more.

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A perfect storm of deteriorating demand & elevated inventories deepens the downturn

Worsening consumer economic sentiment, coupled with inflation and supply chain “kitting” challenges, have hampered Smartphone and PC demand. OEMs, who have carried elevated memory inventories due to COVID-related supply chain concerns and unrealized expectations of 2H 2022 demand growth, are in the process of de-risking their balance sheets and rapidly depleting memory inventories, which is resulting in a dramatic decline in DRAM demand.

The latest server platforms from Intel and AMD finally shipped to OEMs in late 2022 but will need ~six months to qualify, providing a headwind to near-term server shipments and associated memory demand. At the same time, DRAM suppliers have built up significant inventory positions as production growth has continued to outpace demand.

The combination of elevated OEM and supplier inventories and deteriorating demand pushed the market into a severe downturn, starting in late Q2 2022 and worsening throughout the second half of 2022, with blended DRAM pricing falling by more than 20% Q3-22 and nearly 30% in Q4-22.

Weak market conditions are expected to persist at least through the 1st half of 2023. As a result, the suppliers are taking actions to rebalance supply/demand dynamics. Suppliers have reduced shipments into the market (therefore building inventory), and most suppliers have announced capex cuts for 2023 to lower production growth for the year.

The outlook for 2023 is worrisome. Macroeconomic uncertainty is making near-term demand predictions highly volatile. However, aggressive supplier responses will result in historically low production growth and should help bring the market back into balance in 2H-2023, although it may be several quarters before supplier inventories normalize.

DRAM remains critical to compute, and compute remains critical to the overall economy.

In the memory markets, the only certainty is uncertainty.

When the memory markets surpassed $160 billion in revenue in 2018 it would have been easy to believe that a new era had dawned on the notoriously volatile semiconductor segment. The last three years, however, have proven that the only certainty in the memory markets is uncertainty. Revenues collapsed in 2019 by more than 30% as prices fell by nearly 50% for both DRAM and NAND. As the COVID pandemic gripped the world in 2020 it seemed certain that the DRAM market would have continued its disastrous declines…yet it did not. Proving once again that they are volatile and fickle markets, both DRAM and NAND markets grew revenue in 2020, 28% and 6% respectively. 2021 proved to be another growth year for the DRAM market with revenue surging more than 40% to $94 billion – nearly an all-time high.

As the world slowly put COVID behind it, 2022 promised to be another breakout year for DRAM. Yet, even with rational supplier behavior and supporting megatrends, fortunes turned sour in the second quarter and the prospects for the DRAM market are increasingly turbulent. Evaporating consumer demand and overall macroeconomic instability weighed heavily on the DRAM market, as customers stopped buying and prices collapsed. The near-term prospects for DRAM are now very different than they were just a year ago…uncertainty persists.

Compute is driving the global economy, and DRAM is the bottleneck for compute.

Long-term DRAM demand will go as the demand for compute goes, and for the foreseeable future compute is likely to continue its rampant growth. Datacenter demand for DRAM is projected to grow at a compounded rate over 30% for the next five years, which will lift overall DRAM demand to over 20% annually over the same period. The intersection of AI, IoT, and 5G will be a massive tailwind to the demand for compute and thereby DRAM.

Consolidation has helped the DRAM industry remain profitable, but will China’s entrance end the stability?

The DRAM market consolidated down to three major players almost ten years ago. Since then, the industry has remained profitable. Capital intensity is increasing and the margins that DRAM suppliers earn are needed to invest in further technological development. As with the many other semiconductors, China is targeting DRAM for self-sufficiency, but recent US policy changes will have significant implications for China’s ability to achieve this goal. Will China find a way to succeed in DRAM given the severe restrictions on WFE shipments into China? The next few years will likely give us the answer.

The DRAM market monitor service is here to help you track this incredibly dynamic market and synthesize these moving pieces into a coherent picture.

Key Features

Five-year market forecast for supply including fab capacity and wafer production, process and technology roadmaps, and demand by market segment, including PC, Datacenter, Mobile, Automotive, and Consumer.
Market shares from 2015-present by supplier, region, and segment
Supplier financial data from 2015-present including revenue, ASP, operating cost per bit, and operating margin
Detailed two-year quarterly ASP forecast for key DRAM components and modules

The DRAM Quarterly Market Monitor and the Monthly Pricing Monitor include the following deliverables:

Excel database with all historical and forecast data
PDF slide deck with graphs and comments/analysis covering expected evolution
Direct access to a Yole Développement analyst for one year, including opportunities for an on-demand Q&A as well as discussions regarding trends, analyses, forecasts, and breaking news.

What's new

New analysis of the current DRAM market downturn
Updated DRAM market dynamics, highlighting current market conditions and latest supplier and market quarterly results
Status of China’s memory efforts, and impacts from US/China trade disputes
Updated supplier technology roadmaps, die teardown results, and fab construction updates
Latest demand trends and DRAM usage by key segments and technologies

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DRAM Market Monitor

The DRAM Market Monitor is your guide to the volatile DRAM market and includes historical and forecast data covering pricing, supply data, demand by end-market, plus much more.

A perfect storm of deteriorating demand & elevated inventories deepens the downturn

DRAM remains critical to compute, and compute remains critical to the overall economy.