Micron Fab Interruption May Lead to Tighter DRAM Supply in Q2
by 
The global IC market forecast has been revised upward from 8 percent to 15 percent due to stronger than expected average selling prices (ASPs) for DRAMs and NAND flash devices, according to the latest research from IC Insights.
The biggest revisions to IC Insights’ 2018 McLean Report were in the memory market. The growth forecast for DRAMs in 2018 has jumped to 37 percent, up from 13 percent, while NAND flash memory growth has bounced up from 10 percent to 17 percent.
The ASP for DRAM is expected to climb by 36 percent in 2018 compared to 2017 when prices rose by 81 percent, according to the market research firm. The ASP for NAND flash is forecast to increase by 10 percent in 2018, after rising by 45 percent in 2017.
However, unit volume growth in 2018 for DRAM and NAND flash will only rise by 1 percent and 6 percent, respectively.
The DRAM market segment plays a significant role in the total growth of the IC industry, particularly over the past few years. For example, in 2016, the DRAM market dropped by 8 percent in part due to a 12 percent decline in ASP, cutting the total IC industry growth rate by 2 percent, according to IC Insights. This changed in 2017 as prices rose and supply became tight across several IC segments. The DRAM market lifted the total IC market by 9 percent in 2017 and is forecast to boost the total IC market by 5 percent in 2018.
The DRAM market is forecast to be the largest single product segment in the IC industry in 2018, reaching $99.6 billion, compared to the NAND flash market forecast of $62.1 billion.
DRAM suppliers continue to post strong growth despite a slowdown in price hikes. Micron, one of the top three DRAM suppliers, reported today that revenues for the second quarter of FY 2018 were 8 percent higher than the previous quarter, and up 58 percent compared to the same period last year, reaching $7.35 billion.
Micron’s president and CEO Sanjay Mehrotra attributes part of its performance to its “ongoing shift to high-value solutions as we grew sales to our cloud, mobile and automotive customers and set new records for SSDs and graphics memory.”
The semiconductor industry is off to a strong start in 2018. Global sales of semiconductors reached $37.6 billion in January 2018, increasing by 22.7 percent compared to January 2017, according to the Semiconductor Industry Association (SIA). This marks the 18th consecutive month of year-to-year sales increases.
However, global sales in January were 1 percent lower than December 2017, which is a normal seasonal market trend. Monthly sales are compiled by the World Semiconductor Trade Statistics (WSTS) organization.
“All major regional markets saw double-digit growth compared to last year, with the Americas leading the away with year-to-year growth of more than 40 percent,” said John Neuffer, SIA’s president and CEO, in a statement. “With year-to-year sales also up across all major semiconductor product categories, the global market is well-positioned for a strong start to 2018.”
Semiconductor makers agree that 2018 is shaping up to be a strong growth year.
Thanks to “good business momentum and a pipeline of key product launches” Dialog Semiconductor expects “2018 will be a year of good revenue growth,” and “broadly in line with the financial 2017,” said Jalal Bagherli, Dialog’s CEO during a 2017 earnings conference call in February.
Dialog Semiconductor posted 13 percent growth in FY2017, reaching $1.4 billion. “Investing in R&D is vital to drive long-term revenue growth, and in 2017, we invested in our people and our products while maintaining rock-solid financial execution,” Bagherli said. “This year, we have delivered double-digit revenue growth maintained or increased underlying profitability across our business segments and returned close to $175 million of cash to our shareholders.”
Even Infineon Semiconductors, whose revenues are impacted by the weaker U.S. dollar, expects growth to continue in the five percent range in FY2018.
“For the rest of the 2018 fiscal year, we expect an unchanged business momentum only affected by the significantly weaker U.S. dollar,” said Reinhard Ploss, Infineon’s CEO during a Q1 2018 earnings conference call in January. “This is reflected on our adjusted guidance.”
“However, the underlying growth for this year remains strong,” he added. “At a constant dollar exchange rate, our growth outlook would be at 11 percent at midpoint. And obviously, if you’re reported in U.S. dollar, as most of our competitors, we would even guide for 16 percent growth at the mid-point.”
Related posts
