End of Incredible Multi-Year Rally for 2018 DRAM and NAND Markets – Yole Développement

Extracted from: DRAM & NAND services – Memory Research – Yole Développement (Yole), 2019

Outlines:
• Without a doubt, these megatrends have had a significant impact on the semiconductor industry, especially the memory markets.
• Yole announces a $165 billion stand-alone memory market in 2018, with more than $160 billion attributable to the DRAM and NAND market segments.
• The DRAM market declined abruptly in 4Q18 after ten consecutive quarters of growth.
• NAND market conditions softened dramatically in 4Q18, despite 4Q traditionally being a strong seasonal quarter.
• Despite a surprisingly weak finish to the year, there is optimism that the NAND market is close to a turning point.

The combined DRAM and NAND memory markets experienced a period of extraordinary growth over the past several years, driven by important megatrends including mobility, cloud computing, AI , and IoT. Without a doubt, these megatrends have had a significant impact on the semiconductor industry, especially the memory markets.

Yole announces a $165 billion stand-alone memory market in 2018, with more than $160billion attributable to the DRAM and NAND market segments. It anticipates that long-term demand, driven by these megatrends, will result in memory continuing to increase its share of the overall semiconductor market. In addition to growing demand, prudent supply management from the industry leaders (e.g. Samsung, Micron, etc.) over the past two years enabled combined DRAM and NAND revenue growth of 107%, up from $78 billion in 2016.

DRAM market stumbles as datacenter demand disappears
“The fourth quarter of the year is typically a seasonally strong quarter for DRAM demand but Q4 2018 broke with historical trends due to relatively weak demand in both mobile and datacenter,” asserts Mike Howard, VP of DRAM and memory research, Yole. “The weak mobile market was not a big surprise. Handset vendors have struggled over the last few years to offer new features that entice customers enough to upgrade their existing smartphones.“

Is the NAND market close to a turning point?
“Despite a surprisingly weak finish to the year, there is optimism that the NAND market is close to a turning point as elasticity is driving rising NAND storage content across several applications including client SSDs and smartphones,” explains Walt Coon, VP of NAND and memory research, Yole. “The pricing environment remains soft early in 2019, but conditions are improving as demand begins to recover – there is potential for tight market conditions in 2H19, coinciding with seasonal demand recovery and the expected rebound in datacenter demand.”