Server DRAM and HBM Fuel Growth as 4Q24 Revenue Climbs Nearly 10%

DRAM Revenue Hits New Heights

In a recent dive into the world of memory technology, TrendForce has launched some eye-catching numbers: global DRAM industry revenue soared past a staggering US$28 billion in the fourth quarter of 2024. That’s a remarkable 9.9% increase from the previous quarter! What’s driving this surge? It seems that rising contract prices for server DDR5 and a concentrated push in HBM shipments are the main culprits, fueling continued revenue growth among the top three DRAM suppliers.

But here’s the twist: while most contract prices across various applications have been on a downward trend, the demand for high-capacity server DDR5 from major American cloud service providers (CSPs) has helped keep those prices buoyant. It’s a classic case of supply and demand playing out in real-time. Looking ahead to the first quarter of 2025, however, things are expected to cool off. Historically, this is a slow season for the industry, which means we could see a dip in overall bit shipments from DRAM manufacturers.

What’s Next for DRAM Suppliers?

As we approach 1Q25, PC OEMs and smartphone vendors will likely ramp up their efforts to clear out existing inventory. This could prompt DRAM suppliers to pivot, shifting some of their production focus back to server DDR5 from DDR4 and HBM. But with CSP demand showing signs of weakness, it’s anticipated that contract prices for conventional DRAM, as well as the combined prices for conventional DRAM and HBM, might take a hit in the upcoming quarter.

Samsung vs. SK hynix: The DRAM Showdown

In the ongoing battle for DRAM supremacy, Samsung has managed to hold onto its crown, raking in $11.25 billion in revenue for 4Q24, marking a 5.1% increase quarter-over-quarter. However, it’s not all smooth sailing for the tech giant; its market share has dipped slightly. The drop in bit shipments can be attributed to a decrease in demand for LPDDR4 and DDR4, largely due to inventory reductions in the PC and smartphone sectors. Plus, Samsung only began ramping up its HBM shipments toward the tail end of 2024, which further impacted those shipment volumes.

On the other side of the ring, SK Hynix is gaining ground. The second-ranked supplier reported a whopping $10.46 billion in revenue for 4Q24, a 16.9% increase from the previous quarter, and its market share has climbed to 36.6%. This growth can be largely credited to its ramped-up HBM3E shipments, which more than compensated for declines in LPDDR4 and DDR4 shipments.

Meanwhile, Micron holds steady in third place with $6.4 billion in revenue, reflecting a 10.8% quarter-over-quarter increase. Its growth is also tied to expanded server DRAM and HBM3e shipments, allowing it to maintain its market share from the previous quarter.

Challenges for Taiwanese DRAM Manufacturers

However, it’s not all sunshine and rainbows for everyone in the DRAM landscape. Taiwanese manufacturers faced some tough times in 4Q24, experiencing revenue declines due to weaker demand for consumer DRAM and fierce competition in the DDR4 market from Chinese suppliers. For instance, Nanya Technology reported a revenue drop to $203 million, down 19.3% quarter-over-quarter, as demand for consumer DRAM softened.

Similarly, Winbond saw its consumer DRAM shipments take a hit, resulting in a revenue decline to $119 million—a staggering 22.4% drop from the previous quarter. Even PSMC felt the pinch, with its DRAM revenue falling 37.9% quarter-over-quarter to just $11 million, as wafer input volumes shrank. Overall, PSMC’s revenue dropped 10% quarter-over-quarter, even when considering Foundry service revenue, highlighting the challenges posed by stable demand from foundry customers.

As we navigate through these shifting tides in the DRAM market, it’s clear that adaptability will be key for suppliers looking to thrive in an ever-evolving landscape. What do you think the future holds for these major players? Will they innovate their way out of these challenges, or will the competition continue to heat up? Only time will tell!

Background Information

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About Samsung:

Samsung, a South Korean multinational conglomerate, has established itself as a global leader in various industries, including electronics, technology, and more. Founded in 1938, Samsung's influence spans from smartphones and consumer electronics to semiconductors and home appliances. With a commitment to innovation, Samsung has contributed products like the Galaxy series of smartphones, QLED TVs, and SSDs that have revolutionized the way we live and work.

  

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About SK hynix:

SK Hynix is a important South Korean semiconductor company known for its innovative contributions to the global technology landscape. Specializing in the production of memory solutions, SK Hynix has played a vital role in shaping the semiconductor industry. With a commitment to research and development, they have continuously pushed the boundaries of memory technology, resulting in products that power various devices and applications.

  

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Technology Explained

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DDR4: DDR4 is a generation of Double Data Rate (DDR) dynamic random access memory (RAM) technology. It is a type of RAM that utilizes a higher clock frequency and is more power-efficient than its predecessors. As a result, it is capable of processing data more quickly than other RAM in the computer industry. Its increased speed and power efficiency are beneficial for applications such as gaming, rendering, and machine learning. It is designed for high-performance computing and enables faster access to stored information, resulting in better overall performance for the user. Furthermore, because of its low voltage requirements it requires less power consumption, making it an attractive option for many computer systems. DDR4 is set to become the primary RAM in most computer systems as the industry transitions away from its predecessors.

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DDR5: DDR5 (Double Data Rate 5) is the next generation of memory technology for the computer industry. It is a modern day improvement on earlier DDR technologies, with faster speeds, greater bandwidth and higher capacities. DDR5 enables higher resolution, seamless gaming experiences and faster data transfer rates, making it an ideal choice for high-performance computing and 4K gaming. With its greater RAM compatibility, DDR5 provides faster buffering times and raised clock speeds, giving users an improved overall work system. DDR5 is also optimized for multi-tasking, allowing users to multitask without experiencing a significant drop in performance, increasing the productivity of digital tasks. As an ever-evolving technology, DDR5 is paving the way for the computer industry into a new and powerful era.

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Foundry: A foundry is a dedicated manufacturing facility focused on producing semiconductor components like integrated circuits (ICs) for external clients. These foundries are pivotal in the semiconductor industry, providing diverse manufacturing processes and technologies to create chips based on designs from fabless semiconductor firms or other customers. This setup empowers companies to concentrate on innovative design without needing substantial investments in manufacturing infrastructure. Some well-known foundries include TSMC (Taiwan Semiconductor Manufacturing Company), Samsung Foundry, GlobalFoundries, and UMC (United Microelectronics Corporation).

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HBM3E: HBM3E is the latest generation of high-bandwidth memory (HBM), a type of DRAM that is designed for artificial intelligence (AI) applications. HBM3E offers faster data transfer rates, higher density, and lower power consumption than previous HBM versions. HBM3E is developed by SK Hynix, a South Korean chipmaker, and is expected to enter mass production in 2024. HBM3E can achieve a speed of 1.15 TB/s and a capacity of 64 GB per stack. HBM3E is suitable for AI systems that require large amounts of data processing, such as deep learning, machine learning, and computer vision.

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