This year, the DRAM industry is undergoing major changes, and upstream and downstream manufacturers are on high alert

Latest update time：2015-02-21

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After the global DRAM market experienced a century of great consolidation, DRAM manufacturers entered a period of prosperity with huge profits. However, the DRAM industry will enter a period of volatility in 2015. The three major camps, including Samsung Electronics, SK Hynix, and Micron, all have their own plans. Downstream companies are facing the market monopoly of DRAM manufacturers and are keeping a close eye on the situation. Upstream and downstream manufacturers are all on high alert to cope with possible changes in the industry.

Memory industry players pointed out that in the past decade, the DRAM industry has gone through three important stages: the ice age, volcanic eruption, and the establishment of three major sectors. That is, it fell into the ice age of price collapse before the major industry consolidation, the century-long consolidation took place from 2008 to 2012, and after 2013, the three major camps of Samsung, SK Hynix and Micron were established.

Since 2015, the DRAM industry has become more unpredictable.

Samsung's wafer foundry business is facing severe challenges. The NAND Flash industry is on the verge of price pressure due to increased supply, and the DRAM business has transformed into the most profitable golden goose. Although the industry believes that Samsung will not expand DRAM production after grabbing orders for 14nm FinFET process from Qualcomm and Apple, Samsung's DRAM business is still advancing rapidly recently. Whether it will adopt a strategy of killing the goose to get the eggs or a long-term strategy will affect the overall industry competition.

Micron has made a big bet. It has negotiated a new DRAM contract with the Formosa Plastics Group, changing the current market price system to a profit and loss sharing system starting in 2016. If DRAM price fluctuations cause Inotera to suffer operating losses, Micron will also have to bear half of the losses. This seems to indicate that Micron has made a bet that there will be no losses in the DRAM field in the next five years.

Memory industry players said that the DRAM industry is dominated by three giants, Samsung, SK Hynix, and Micron, and each company has the ability to maintain stable prices. In particular, Samsung and SK Hynix have taken advantage of their 20nm process and have a combined market share of more than 70%. Micron has a market share of about 24%, but has accepted a profit-and-loss sharing contract and should strive to defend prices in the future.

Since DRAM and NAND Flash are indispensable key components, as DRAM supply is concentrated in the hands of three major suppliers, end customers including PCs and smartphones are increasingly worried that they may be strangled, and will strive to seek solutions such as strategic alliances in the future.

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