Combined DRAM and NAND revenue was US$25.4 billion in Q2 2019, down 5% from Q1 and down 39% year-over-year as sluggish demand and elevated inventory levels continued to plague the memory markets.
After the summer break, the memory team of Yole Développement (Yole) is pleased to come back to you with a detailed snapshot of the DRAM & NAND industries. This overview includes latest market figures and trends from Q2 2019. What are the latest news? What is the status of the market indicators? Is the market still growing? What are the revenues of each key memory players? What are their strategies, facing to the market evolution?… Memory analysts invite you to discover an up-to-date overview of this industry.
Megatrends are of course still present in this competitive landscape. The automotive is for example playing a key role. Even if the automotive memory business is still relatively small market segment with less than 3% of the overall stand-alone memory market in 2018, companies are seriously considering investments and developments in this industry. Therefore, driven by important technology trends, automotive is expected to be the fastest growing memory-market segment in the next 5 years. Yole’s memory analysts announce more than 20% CAGR between 2018 and 2024.
Autonomous vehicles are radically changing the memory requirements. By 2024, the average NAND content in cars is expected to increase dramatically, exceeding 300 GB/vehicle. Yole announces an impressive 79% CAGR between 2018 and 2024. Over the same period, DRAM should reach a 42% CAGR from 3.2GB per vehicle today to nearly 20GB per vehicle…
Without doubts, the wind of change is there. The market research & strategy consulting company Yole, presents for you today its quarterly snapshot of the DRAM & NAND industries.
NAND market: the worst will soon be behind you
NAND market conditions remained soft in Q2 2019, with seasonally weak demand and abnormally high inventories keeping the pricing environment under downward pressure. Quarterly revenue was US$10.1 billion in Q2 2019, down slightly from Q1-19 and down 35% year-over-year. Blended NAND prices fell 13% from Q1-19, the sixth consecutive quarter of sequential price declines. Bit shipments were up 14% in the quarter.
NAND revenue-based market share rankings changed slightly in Q2 2019:
- Samsung increased its market share leadership position to 37% of the total revenue, up 5 points from Q1 2019.
- Toshiba Memory held the second position with 19% of total revenue, followed by Western Digital at 14%
- SK hynix market share was 11%, overtaking Micron at 10% for the 4th position
- Intel accounted for 8% of industry revenue, while the remaining players accounted for less than 1% of NAND industry revenue.
Although NAND inventory remains elevated, several suppliers were able to reduce inventory levels in the quarter. The power outage at Toshiba Memory’s Yokkaichi facility late in the second quarter will reduce industry production, helping to accelerate inventory declines. Normalizing inventory levels, rising seasonal demand, and impacts from prior utilization and capex cuts provides hope for a likely recovery in the second half of 2019 and an improved 2020 outlook.
The DRAM market: winter has come
The DRAM market continued to decline in Q2 2019. Quarterly revenue fell 11.4% in Q2 2019, to US$15.3 billion. Prices fell 20.7% during the quarter, marking three consecutive quarters that prices have fallen. Revenue would have fallen much more had shipments not grown 16.3% for the quarter. The strong growth in shipments was in stark contrast to Q1 2019 when shipments fell 3%.
The market shares of the DRAM triumvirate (Samsung, SK hynix, and Micron) remained largely unchanged in Q2 2019 although Samsung did pick up 2% of market share while SK hynix and Micron each surrendered 1%. Given the capital expenditure plans for 2019 and 2020 we do not expect significant shifts in manufacturing market share this year.
While we still anticipate several more quarters with falling prices, the recovery is coming into clearer focus. Prices are expected to fall 45% in 2019 and continue falling in early 2020 before prices begin climbing in mid-2020.
Memory business: what’s next?
Last summer, Yole’s memory team was pleased to welcome the leading memory companies at the 1st Executive Memory event powered by Yole: Memory industry: What could happen in the future?
During few hours, memory companies and Yole’s analysts had the opportunity to exchange and debate about the latest technical and market trends. They commented the strategy of each leading players and identified business opportunities:
- Mike Howard, VP of DRAM & Memory Research at Yole, comments the inevitable DRAM market consolidation: “DRAM consolidation took more than 30 years as new participants continually entered the market with the aid of IP from distressed suppliers and government-backed capital”, asserts. And he adds: “Prior to 2013, DRAM prices fell 75% of the time…since consolidation in 2013 they have only fallen 50% of the time…”
- Walt Coon, VP of NAND & Memory research at Yole also comments the evolution of the NAND industry: “Over the past 2 decades, the NAND market has experienced tremendous growth but has been plagued by significant volatility and prolonged downturns.” In addition, Walt Coon observes possible consolidation scenarios…
Yole would like to thank all speakers and participants for this great moment and already announces a new session in 2020. With no possible turning back, Yole’s expertise is growing and its market positioning towards the memory market segment is confirmed. The collection of memory products and services gather an impressive amount of analyses and market data:
- The latest technology & market report, MRAM Technology and Business 2019, has been launched during the FMS week, beginning of August. MRAM promises life beyond eFlash: the embedded MRAM market is taking off and is expected to reach $1.2B by 2024. For more info, click on MRAM industry overview
- The Q2 2019 Memory Monitor is also now available: DRAM Service – Memory Research and NAND Service – Memory Research.
Mike Howard is a member of the Memory team at Yole Développement, serving as VP of DRAM and Memory Research within the Semiconductor & Software division. He is a daily contributor to the business development of memory activities, with a special focus on the DRAM industry. Mike’s mission is to propose a comprehensive understanding of the memory and semiconductor markets, with a dedicated collection of market updates, Market Monitors, and Pricing Monitors. Over the course of his career Mike has developed broad DRAM memory expertise, including an effective combination of industrial and market research experience. Prior to his position at Yole as VP of DRAM and Memory Research, Mike worked at Micron Technology for more than a decade. During this time he held several key roles in Corporate Development, Marketing, and as a photolithography engineer in R&D. Mike earned a master’s of Business Administration from The Ohio State University (United States), along with a B.S. in Chemical Engineering and a B.A. in Finance from the University ofWashington (Washington, United States).
Walt Coon joins Yole Développement’s memory team asVP of NAND and Memory Research, part of the Semiconductor & Software division. Walt is leading the day-to-day production of both market updates, Market Monitors and Pricing 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).
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