Sales of both DRAM and NAND are expected to set record highs in 2017, according to IC Insights. In both cases, the strong annual upturn in sales is being driven almost entirely by fast-rising ASPs.
In the case of DRAM, unit shipments are actually forecast to show a decline in 2017, said IC Insights. Moreover, NAND shipments are forecast to increase only 2%, providing a small, added boost to market growth in the segment. Prices for DRAM and NAND first began increasing in the second half of 2016, and continued with quarterly increases through the first half of 2017.
With DRAM ASPs surging since the third quarter of 2016, DRAM manufacturers once again stepped up their spending for the segment, IC Insights indicated. However, the majority of this spending is going towards technology advancements and not toward capacity additions.
IC Insights believes that essentially all of the spending for flash memory in 2017 will be used for 3D NAND flash memory process technology as opposed to planar flash memory. A big increase in NAND flash capital spending in 2017 is expected from Samsung as it ramps 3D NAND production at its large, new fab in Pyeongtaek, South Korea.
Historical precedent in the memory market shows that too much spending usually leads to overcapacity and subsequent pricing weakness. Samsung, SK Hynix, Micron, Intel, Toshiba/SanDisk, and XMC/Yangtze River Storage Technology each plan to significantly ramp up 3D NAND flash capacity over the next couple of years (with additional new China-based producers possibly entering the market). The likelihood of overshooting 3D NAND flash capacity over the next few years is very high, IC Insights said.
The DRAM quarterly ASP growth rate peaked in the fourth quarter of 2016 but continued a strong upward trend through 2Q17. IC Insights forecast the DRAM ASP to increase (though marginally) into third-quarter 2017 before edging slightly negative in the fourth quarter of the year, signaling the end of another cyclical upturn.
Even though DRAM ASP growth is forecast to slow in the second half of 2017, the annual DRAM ASP growth rate is still forecast to be 63%, which would be the largest annual rise for DRAM ASPs dating back to 1993, IC Insights said. The previous record-high annual growth rate for DRAM ASP was 57% in 1997. For NAND flash, the 2017 ASP is forecast to increase 33%, also a record high gain. |