Date August 2018
By the numbers
- Dynamic random-access memory (DRAM) average selling prices are expected to increase by 36% compared to 2017
- Server and graphics memory are currently driving growth, with mobile and PC DRAM demand less strong, although the graphics memory market is expected to decrease significantly with demand slowing for cryptocurrency
- Flash storage is the new standard, and the trend of replacing spinning disks with solid state drives (SSDs) will continue, spiking demand and likely causing future flash memory shortages as seen in 2017
- Oversupply in the NAND Flash market has resulted in falling prices for SSDs
Types of computer memory: Computer memory consists primarily of DRAM and NAND Flash. DRAM is used for temporary storage in PCs, servers, and mobile devices. NAND Flash is used for permanent storage in mobile devices. NAND is increasingly replacing hard drives in PCs and servers in the form of SSDs due to its significantly faster access speed. The majority of these types of products are commonly bought and sold in the secondary market for a relatively high percentage of cost.
Prices historically volatile: In the past, the markets for commodity DRAM, and to a slightly lesser extent NAND Flash, have been extremely volatile because of the commoditized nature of these products and fluctuations in demand. Typically, there is little differentiation between one manufacturer’s product and the next, resulting in competition in price and availability. Prices and values decrease when availability is high. When availability is scarce, prices and values stabilize, and can sometimes even increase. DRAM market revenue grew 76 percent in 2017 compared to the prior year and is expected to grow another 30 percent in 2018. Some DRAM manufacturers are adding production capacity, which will result in an easing of an under-supplied market and pricing stability.
Equipment is valuable: Manufacturers of DRAM and NAND Flash chips represent a subset of the semiconductor industry. The secondary market of semiconductor tools is significant, though the majority of DRAM and NAND Flash chip manufacturing is performed in Asia. Module manufacturing consists of printed circuit board assembly (PCBA) lines, which typically include screen printers, high-speed chip placement machines, reflow ovens, and automated optical inspection stations. PCBA lines are commonly found in U.S. electronics manufacturing. The useful life of PCBA equipment is long, with a strong market for legacy equipment in developing countries.