Business Strategies

DRAM Prices Down, But Not So Bad

DRAM Spot Price per GB HistoryFor the past ten months DRAM prices have been undergoing a steady slide.  Is the market in a crisis?  Not really!

Today’s low spot price of $4.30/GB puts us on a par with February 2013, a full two years ago (see chart).  DRAM makers have done a lot to reduce their production costs since that time, so their margins this quarter will be much better than they were in the first quarter of 2013.

But we are still a very long way from the bottom of the last market downturn.  In late 2012 spot prices reached a low of $2.52/GB, a full 41% lower than today’s lowest spot prices.

The Memory Guy models the production costs of leading memory chips, and DRAM manufacturing costs have been decreasing for the past several years at an average annual rate of about 30%.  That means that costs today are about half of what they were two years ago, and one third of their level this time in 2012.

So even though today’s Continue reading

Semiconductor Market Ends Year on a High Note

SIA LogoThe Semiconductor Industry Association this week announced the year-end World Semiconductor Trade Statistics (WSTS) revenues for 2014.  Worldwide sales grew 9.9% to reach a record total of $335.8 billion, outperforming the WSTS fall forecast.  Annual sales increased in all four regional markets for the first time since 2010. Memory was the fastest growing segment, increasing 18.2%, partly based on DRAM growth of 34.7%.It’s encouraging that all geographical areas experienced growth.  This implies that the world economy is finally on the mend.

The industry’s 9.9% worldwide growth was a good bit lower than Objective Analysis’ December 2013 prediction of growth in excess of 20%.  We admit that we overshot, expecting both higher bit growth and stronger pricing in DRAM and NAND flash than actually materialized.

The $335.8 billion number is really Continue reading

Cypress to Merge with Spansion

NOR flash and SRAM revenues are in decline, but MCUs are growing(Excerpted from an Objective Analysis Alert issued 1 December 2014.)

In a move touted as a merger of equals, Cypress will acquire Spansion in an all-stock transaction slated to close in the second quarter of 2015.  The purchase price is estimated at $1.6 billion.

Cypress points out that it is the leading producer of SRAMs, and that Spansion is the leading NOR flash provider.

One striking feature of this transaction is the Continue reading

Is Apple Losing Dollars to Save a Few Cents?

Is Apple Losing Big Bucks by Trimming its Costs by a Few Cents?An article in a recent issue of Business Korea posits that Apple may be having trouble stemming from the company’s adoption of TLC flash in it’s new iPhone 6.

The article states:

considering that technical defects mainly occur in the 128GB version of the iPhone 6 Plus, there might be a problem in the controller IC of triple-level cell (TLC) NAND flash.

The problem has led to numerous warranty replacements and the looming prospects of a recall.

(Note that Continue reading

Is the DRAM Market Entering a Shortage?

DRAM Spot Prices are Consistently above ContractLong-term clients of mine, even those dating back to my decade at Dataquest in the 1990s, are familiar with the concept that spot prices behave differently during a shortage.  When there is too much DRAM spot prices remain below contract prices, because OEMs who bought too much product clear their inventory at quarter end (and other times) by selling at a loss.

During a shortage the opposite is true: OEMS find that they can’t get as much DRAM as they wanted through their contract sources, so they shop for the balance on the spot market.  Since there are more buyers than sellers, spot prices invariably raise higher than contract prices.

When the prices change from one state of affairs to the other then it is safe to assume that Continue reading

SIA: Memories Drive Record Semi Revenues

SIA LogoThe SIA yesterday released the WSTS semiconductor sales data for September.  Monthly revenues reached a record $27 billion driving third-quarter revenues to their own record of $81 billion.  This was the seventh straight month of semiconductor growth, the first such run-up since 2010.

This quote, by SIA CEO Brian Toohey really caught The Memory Guy’s eye: “Sales of memory products have increased sharply compared to last year and continue to be a major driver of industry growth.”

A lot has been happening to drive this increase in memory revenues: The recent SK hynix fire increased DRAM prices, but Continue reading

Samsung Announces 3D NAND Production

Toshiba's BiCS 3D NAND 2007 diagramSamsung has announced production of its 3D NAND technology.  This approach, first introduced by Toshiba in 2007, allows NAND flash makers to achieve more bits per chip by building NAND strings, which normally run across the surface of the chip, as vertical stacks.

It’s a fascinating technology, since it harnesses exotic steps invented by DRAM makers in the 1990s to get over scaling problems in that technology.  At the time DRAM had to go vertical to follow Moore’s Law and there were two schools of vertical DRAM: Stacked Capacitor, and Trench Cell.  The stacked capacitor camp layered polysilicon and silicon dioxide into layers to form a vertical capacitor.  The trench camp etched a very narrow and deep hole into the silicon and lined it with the capacitor plates.  Both worked very well, but over time the trench makers have Continue reading

Does the ‘Windows Bump’ Really Exist?

Windows Introductions vs DRAM Bit GrowthDRAM manufacturers often refer to “The Windows Bump” – a phenomenon that is believed to occur after every release of a new version of the Windows operating system.  According to this theory DRAM demand increases for a period following an introduction.

An example: in a recent article Kingston VP Scott Chen said that an increase in sales for Windows 8 might help raise DRAM demand, leading to more stable prices.

Demand is expected to pick up on the upcoming launch of Windows 8 tablets and Ultrabook PCs later in the second half of 2012.

Does the Windows Bump really exist?  The Memory Guy thought Continue reading

Adesto Acquires Atmel’s Serial NOR Business

Atmel Sells Serial Flash Business to AdestoIt’s not often that a small private firm acquires a part of a larger public firm, but that’s what happened today with Atmel and Adesto.  Adesto, a manufacturer of alternative memory technology, has purchased Atmel’s serial NOR flash business for an undisclosed sum.

The transaction covers the Atmel “Data Flash” and “BIOS Flash” product families and the employees supporting those products.  Atmel has retained its Serial EEPROM, Crypto and Digital Temperature Sensor memory product lines and plans to continue to invest in those businesses.

This is not a small thing.  Serial NOR now accounts for roughly Continue reading

Toshiba to Cut NAND Production by 30%

Toshiba's Fab 5 in YokkaichiIn a surprise announcement Toshiba has said that it will immediately cut NAND flash production by approximately 30%.  The company explains that this is being done “to reduce inventory in the market and improve the overall balance between supply and demand.”  Toshiba’s release implies that this move is expected to improve prices, which have dropped as low as $0.31/GB recently.

By common measures of market share, which typically leave out SanDisk (for reasons too complex to discuss here) Toshiba holds a share of roughly 30% of the NAND flash market.  By cutting its output by 30% Toshiba would be reducing overall NAND supply by 10%.  If we were to include SanDisk, then that percentage would decrease to about 7.5%.  Either one of these is significantly more than Continue reading

Contact

Jim Handy Objective Analysis Memory Market Research +1 (408) 356-2549 Jim.Handy (at) Objective-Analysis.com

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