Memory market fortunes turn after disappointing 2020

The economic fallout from the global COVID-19 pandemic has meant mixed fortunes for memory technologies as the world juggles new working practices with fluctuating inventory and supply levels.

In a year of false starts, changing end-user demands and global economic uncertainty, the memory industry has seen mixed fortunes. There have been gains and disappointments as the market comes to terms with new realities and new trajectories.

The market research and strategy consulting company, Yole Développement (Yole) investigates the memory business with the identification of disruptive memory technologies and the analysis of the strategy of the leading memory companies. With a quarterly follow-up of the market, Yole’s analysts deliver a comprehensive description of the memory ecosystem with business and technical issues, especially in its latest technology & market report, Status of the Memory Industry.

NAND and DRAM are ubiquitous technologies, together accounting for 96% of the overall stand-alone memory market. The remaining 4% consists of a broad spectrum of technologies that fit the requirements of different end-systems and markets. NOR flash is the third-largest market (~$2.4B in 2020), fuelled by numerous applications including industry and security, consumer, and automotive electronics, as well as telecom infrastructure. Emerging Non-Volatile Memory (NVM) – including PCM, MRAM, ReRAM – are gaining significant momentum but will remain less than 3% of the total stand-alone memory market into 2026.

The memory team invites you today to discover a snapshoot of this industry, with key memory market figures and latest trends.

The DRAM market: let the good times roll – multi-year recovery underway

There were setbacks to the anticipated recovery of the DRAM market in 2020 due to a combination of factors. In addition to increasing tensions around trade between the US and China, the worldwide COVID-19 pandemic took its toll. Initially, the move to working from home, and concerns around the supply chain, both as a direct result of the pandemic, led to an increase in demand for DRAM in the first half of 2020. The primary beneficiaries of this were the datacenter and notebook PC sectors, as companies and education moved to at-home working. In the second half of the year, however, demand fell away. Weak demand, coupled with OEMs using up their inventories meant that DRAM prices fell in Q3 and Q4 2020.

The outlook for DRAM looks bright in 2021, however. Market conditions have already improved. PC demand continues to be robust as working from home is still in place for companies and institutions around the world. The strong demand for datacenters has meant that prices have returned to their previous levels. Now, inventories have normalized although there has been constrained supply for certain products.

DRAM is also benefitting from an increase in mobile demand, as consumers are looking once more to buy smartphones. In addition, the ongoing deployment of 5G is likely to boost demand throughout the rest of this year.

The only segment which has not rebounded is traditional enterprise OEM DRAM. Here, there is outstanding inventory, which coupled with a general economic malaise as a result of the pandemic, has resulted in weak demand.

Looking further ahead, the outlook for the DRAM market is more positive. Underinvestment in manufacturing capabilities over the last two years is being addressed with capex which is expected to increase by ~20% in 2021. Micron is ramping up 1anm production while Samsung and Hynix are both focusing on 1znm this year. Demand is expected to be strong over the next 12-24 months with revenues forecast to exceed $97B this year and to rise again to $122B in 2022. Bit growth is forecast to be ~21% in 2021 and to continue to grow in 2022.

The NAND market: delayed recovery finally underway after sluggish 2020…

Like DRAM, NAND also suffered as a result of COVID-19 and US-China trade tensions. The recovery expected in 2020 did not materialize, although the move to working-from-home/ learning-from-home coupled with concerns over supply chain disruption, saw an increase in demand for the first half of 2020. Like DRAM, this was focused on datacenters and notebook PCs and was followed by a fall in demand in the second half of the year. ASPs fell significantly in the second half of 2020 due to a decrease in demand and because OEMs were using up existing inventory.

Similar factors to those in the DRAM market contribute to a more positive outlook for the NAND market in 2021. Robust demand for notebook PCs and gaming has strengthened the client SSD segment in particular. There has also been strong demand for datacenter products which means prices have rebounded as inventory levels normalize once more. There is, however, constrained supply for certain products.

As with DRAM, the NAND segment is expected to benefit from the increased demand for mobile, with increased smartphone demand after a period of consumer inactivity and continuing 5G deployment. All of these factors are expected to boost demand for NAND for the rest of 2021.

Supply chain uncertainty from semiconductor controllers and other NAND sub-components has applied pressure for higher ASPs. Samsung’s manufacturing facility in Austin, Texas, USA, which manufactures the NAND controllers for its SSDs was shutdown recently and the ensuing disruption highlighted the uncertainty around the supply chain. The facility’s shutdown is expected to accelerate the NAND pricing recovery, particularly for PC SSD and mobile markets, where the effects of controller shortages have been most pronounced.

Blended NAND pricing is expected to rise in Q2 2021—versus prior expectations of price increases starting in the second half—and is poised to remain strong through the remainder of 2021. Price increases, in combination with expected 2021-bit growth of 36% is forecasted to result in NAND revenue approaching $70B in 2021, far surpassing the previous record of $59.6B set in 2018.

To support the deployment of >100-layer 3D NAND processes, new shell builds, and the YMTC ramp up, capex is expected to increase 16% in 2021. At the same time, bit growth is expected to increase this year to meet renewed demand. While QLC NAND demand remains low, it is gaining traction in the consumer/client PC SSD market.

The status of the emerging NVM market segment

Both stand-alone and embedded NVM remain as emerging sectors. Stand-alone NVM includes PCM, 3D XPoint, MRAM. Yole expects the stand-alone NVM market to increase from 2020’s ~$595M to ~$3.3B in 2026, in its Emerging Non-Volatile Memory report, 2021 edition. This forecast assumes that Intel will be able to ramp up 3D XPoint manufacturing capacity early next year to meet the demand for low-latency storage for enterprise and client SCM drives. It will also rely on demand for persistent memory, which retains data during an outage, in the form of NVDIMM. 

Of these stand-alone technologies, PCM is expected to dominate because Intel is combining its 3D XPoint products – particularly NVDIMMs – with its server CPUs. MRAM and ReRAM are expected to have a combined market share of ~23% in 2026.

The embedded emerging NVM market is taking off driven by MCUs and the growing IoT business, as well as by memory buffers for ASIC products, such as AI accelerators, display drivers, security ICs and CMOS image sensors for new and emerging applications.  

There are several technologies in the embedded NVM market. The most popular is eMRAM, with activity in developing low power products. Yole forecasts the eMRAM market to be worth ~$1.7B in 2026, or ~76% of the emerging embedded NVM market. Products based on eMRAM technology were introduced in 2020, for example Sony’s GPS chips in Huawei’s smart watches.

Elsewhere, there has been rapid progress in MRAM development as IDM/foundries and equipment suppliers address its technical challenges.

In March 2021, Micron has announced that it will no longer develop its 3D XPoint technology but will increase investment in products using the Compute Express Link (CXL) (More). The company said that there is “Insufficient market validation to justify the high levels of investments required to successfully commercialize 3D XPoint at scale.” Micron was the sole supplier of 3D XPoint to Intel but Intel’s Optane business has not taken off as expected.

Micron hopes to sell its Lehi fab which is dedicated to 3D XPoint production by the end of 2021, rather than convert it to 3D NAND production. The current semiconductor shortage will improve the valuation of the fab, and save Micron ~$400M per year in underutilization charges

Meanwhile, Intel will continue to promote and disseminate its Optane Persistent Memory to datacenter customers but if they are still reluctant to adopt it, it cannot be discounted that Intel could quit the Optane business.

Memory business – What’s next?

By the end of the 3D XPoint supply agreement, Intel needs to start manufacturing 3D XPoint independently. Will they be able to ramp up production in their New Mexico fab?

This and other key questions are the focus of Yole’s daily research activities.

  • As economies begin to re-emerge, and inventories are normalizing once again, what will be the impact of the rising Chinese players on the memory market?
  • What will be the next step in the NAND market consolidation process after the Intel-SK hynix deal?
  • What is the timeline for the long-awaited DDR5 rollout?
  • How new memory protocols and interfaces – CXL, Gen-Z, OpenCAPI, CCIX – will change the memory-module and storage-drive business?

Follow Yole’s memory team and explore their research services to learn more about all these topics and be updated on the fast-changing memory landscape…

About the memory team

Simone Bertolazzi, PhD is a Technology & Market analyst, Memory at Yole Développement (Yole), working with the Semiconductor, Memory & Computing division. As member of the Yole’s memory team, he contributes on a day-to-day basis to the analysis of non-volatile memory technologies, their related materials and fabrication processes.

Previously, Simone carried out experimental research in the field of nanoscience and nanotechnology, focusing on emerging semiconducting materials and their opto-electronic device applications. He (co-) authored several papers in high-impact scientific journals and was awarded the prestigious Marie Curie Intra-European Fellowship.

Simone obtained a PhD in physics in 2015 from École Polytechnique Fédérale de Lausanne (Switzerland), where he developed novel flash memory cells based on heterostructures of two-dimensional materials and high-? dielectrics.

Simone earned a double M. A. Sc. degree from Polytechnique de Montréal (Canada) and Politecnico di Milano (Italy), graduating cum laude.

As VP of NAND and Memory Research, Walt Coon joins Yole Développement’s memory team, part of the Semiconductor, Memory & Computing division.

Based in the US, Walt is leading the day-to-day production of both market updates and Market Monitors, with a focus on the NAND market and semiconductor industries. In addition, he is deeply involved in the business development of these activities.

Walt has significant experience within the memory & semiconductor industry. He spent 16 years at Micron Technology, managing the team responsible for competitor benchmarking, and industry supply, demand, and cost modeling. His team also supported both corporate strategy and Mergers & Acquisitions analysis. Previously, he spent time in Information Systems, developing engineering applications to support memory process and yield enhancement.

Walt Coon earned a Master of Business Administration from Boise State University (Idaho, United-States) and a Bachelor of Science in Computer Science from the University of Utah (United-States).

As VP of DRAM and Memory Research, Mike Howard is a member of the Semiconductor, Memory & Computing division, at Yole Développement (Yole).

Mike’s mission at Yole is to deliver a comprehensive understanding of the entire memory and semiconductor landscape (with special emphasis on DRAM) via market updates and Market Monitors. Mike is also deeply involved in the business development of all memory activities. Mike is based in the US.

Mike has a deep understanding of the DRAM and memory markets with a valuable combination of industry and market research experience. For the decade prior to joining Yole, Mike was the Senior Director of DRAM and Memory Research at IHS. Before IHS, Mike worked at Micron Technology where he had roles in corporate development, marketing, and engineering.

Mike earned a Master of Business Administration at The Ohio State University (United-States), a Bachelor of Science in Chemical Engineering and a Bachelor of Arts in Finance at the University of Washington (Washington, United-States).

Emilie Jolivet is Director of the Semiconductor, Memory & Computing Division at Yole Développement, member of the Yole Group of Companies, where her specific interests cover package & assembly, semiconductor manufacturing, memory and software & computing fields.

Based on her valuable experience in the semiconductor industry, Emilie manages the expansion of the technical and market expertise of the Semiconductor and Software Team. The team interacts daily with leading companies allowing semiconductor & software analysts to collect a large amount of data and integrate their understanding of the evolution of the market with technology breakthroughs. In addition, Emilie’s mission focusses on the management of business relationships with semiconductor leaders and the development of market research and strategy consulting activities inside the Yole group.

Emilie Jolivet holds a Master’s in Applied Physics specializing in Microelectronics from INSA (Toulouse, France).

Related reports & monitors


NAND consolidation, China’s bet on two key players, the rise of the CXL interface: as the memory business narrows, the market keeps growing and is poised to exceed $200B in 2026.

After a difficult finish to 2020, the NAND market outlook improves in early 2021.

The DRAM rocket ship is fueled up and ready for blast off to reach 120B$ by 2022 due to limited supply coupled with resurgent demand.

Embedded Non-Volatile Memory (NVM) readies to take off driven by low-power applications. Stand-alone NVM continues its journey toward mass adoption, despite ecosystem slowdowns.

The 3D-NAND manufacturing equipment market will keep growing, propelled by robust long-term NAND-bit demand and ever-increasing manufacturing complexity.

Related event

Do not miss to watch the Live Market Briefing: DRAM & NAND Memory markets show building strength – Could we be entering the next supercycle?
During this digital event, Yole explored what the next few quarters and years hold for both the NAND and DRAM markets, including demand, pricing, and profitability. Watch the replay now!