DRAM Drives Record 2018 Semiconductor Market Growth

The semiconductor industry in 2018 is expected to top previous sales records, according to two leading research firms.

Although 2018 isn't quite over, IC Insights reports DRAM was the fastest growing IC segment for the year. The 2018 DRAM market is expected to show an increase of 39 percent, a solid follow-up to the 77 percent growth in 2017. The segment experienced a strong rise of average selling prices over the past two years.

The number-one position is not unfamiliar territory for the DRAM market, the firm added. It was also the fastest-growing IC segment in 2013 and 2014.

IC Insights noted that "remarkably, DRAM has been at the top and near the bottom of its lists over the past six years, demonstrating its very volatile and cyclical nature." IC Insights forecasts that DRAM will rank nearly last in terms of market growth in 2019, with a 1 percent decrease in total sales.

After two strong years of growth, Samsung, SK Hynix, and Micron—the world’s three primary DRAM suppliers—have expanded their manufacturing capacity and are beginning to ramp up production, bringing some much needed relief to strained supplies, especially for high-performance DRAM devices. At the same time, shipments of large-scale datacenter servers, which were a primary catalyst for much of the recent DRAM market surge, have begun to ease as uncertain economic and trade conditions factor into decisions about continuing with the strong build out.

NAND flash joins DRAM as another memory segment that has enjoyed very strong growth over the past two years according to IC Insights. Solid-state computing, particularly, has been a key driver for high-density, high-performance NAND flash even as mobile applications continue to be a significant driver. Meanwhile, automotive and computing special purpose logic devices have also been strong performers the past two years. The top five IC markets listed for 2018 are the only product categories that are expected to surpasses the 17 percent growth rate of the total IC market this year.

Earlier, the Semiconductor Industry Association and the World Semiconductor Trade Statistics (WSTS) organization revised their forecast upward and projects annual global market growth of 15.9 percent in 2018 and 2.6 percent in 2019.

“The global semiconductor industry posted solid year-to-year growth in October and is on pace for its highest-ever annual sales in 2018, but growth has moderated in recent months,” said John Neuffer, SIA president and CEO, in a release. “Although strong sales of DRAM products continue to boost overall market growth, sales in all other major product categories also increased year-to-year in October, and all major regional markets posted year-to-year gains. Double-digit annual growth is expected in 2018, with more modest growth projected for 2019.”

Regionally, year-to-year sales increased in China (23.3 percent), the Americas (14.1 percent), Europe (7.0 percent), Japan (5.5 percent), and Asia Pacific/All Other (3.7 percent). Compared with last month, sales were up in the Americas (2.8 percent), Asia Pacific/All Other (1.8 percent), Japan (0.4 percent), and Europe (0.2 percent), but down slightly in China (-0.4 percent).

The WSTS Autumn 2018 global semiconductor sales forecast projects the industry’s worldwide sales will be $477.9 billion in 2018. This would mark the industry’s highest-ever annual sales, said the SIA, a 15.9 percent increase from the 2017 sales total of $412.2 billion.

WSTS projects year-to-year increases across all regional markets for 2018: the Americas (19.6 percent), Asia Pacific (16.0 percent), Europe (13.2 percent), and Japan (9.6 percent). In 2019, growth in the semiconductor market is expected to moderate, with annual sales projected to increase by 2.6 percent. WSTS tabulates its semi-annual industry forecast by convening an extensive group of global semiconductor companies that provide accurate and timely indicators of semiconductor trends.