DRAM Industry Likely To Face Oversupply in 2019 (digitimes.com) 49
While the global DRAM market still remains robust currently, the recent capacity ramps by Micron Technology and the planned kick-off of commercial production by China-based Fujian Jin Hua Integrated Circuit and Innotron Memory (previously known as Hefei ChangXin) could lead to oversupply for the memory in 2019, Taiwanese newspaper DigiTimes reported Thursday, citing industry sources. From the report: Samsung Electronics and SK Hynix would be forced to overhaul their current profit-oriented business strategy as both firms believe that the booming memory market, which has continued for 2-3 years, is likely to be over by the end of 2018, according to a Korea-based Digital Times report. Although Samsung and SK Hynix both stated, at their latest investors conferences, respectively, that they will continue to ramp up capacities for memory chips, the aggressive moves by rival companies have made the two companies hesitate, said the report.
Samsung has seen its share in the DRAM market continue to dive after hitting a high of 50.2% in the third quarter of 2016 as rivals including Micron have jacked up their revenues and profits. Notably, Micron has ramped up its operating margin to as high as 50% so far in 2018 compared to 20% at the end of 2016. Additionally, Samsung saw its share in the market drop to 44.4% in the first quarter of 2018, while Micron managed to ramp up its share to 23.1%, according to IHS Markit. The global DRAM market is expected to reach a peak of US$104 billion in 2018, before contracting by 1.8% and 2.6%, respectively, in 2019 and 2020, according to an industry estimate.
Samsung has seen its share in the DRAM market continue to dive after hitting a high of 50.2% in the third quarter of 2016 as rivals including Micron have jacked up their revenues and profits. Notably, Micron has ramped up its operating margin to as high as 50% so far in 2018 compared to 20% at the end of 2016. Additionally, Samsung saw its share in the market drop to 44.4% in the first quarter of 2018, while Micron managed to ramp up its share to 23.1%, according to IHS Markit. The global DRAM market is expected to reach a peak of US$104 billion in 2018, before contracting by 1.8% and 2.6%, respectively, in 2019 and 2020, according to an industry estimate.
Good. (Score:5, Insightful)
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The summary doesn't really give any reason to believe they have data, they seem to conflate profit margins and market share, where traditionally accepting lower profit margin would allow capturing more market.
So I'll believe it when I see it. It seems more like just marketing that failed to get a competent technical copywriter assigned.
Re:Good. (Score:5, Insightful)
RAM price trends for the last 18 months: https://pcpartpicker.com/trend... [pcpartpicker.com]
Broadly speaking, RAM is roughly twice the price that it was two years ago, all other things being equal (e.g. from $38 to $80 [pcpartpicker.com] and from $200 to $425 [pcpartpicker.com]), though prices seemed to have peaked sometime around the start of 2018, with them being on a very gradual decline ever since.
At the time that the price hikes started, people were saying it was due to several factories being retooled at the same time, and that we should expect the pricing to return to normal in about 1.5-3 years as those factories came back up and new ones were built to handle the increasing demand in the market. Well, it's been about that long, and sure enough, prices seem to have stabilized, may have even started to drop, and now we have more reason to believe that they'll be returning to normal(ish) soon as additional production capacity arrives in the market.
I'll believe it when I see it as well, but, at least so far, this jibes with what I've been expecting.
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I prefer not to take a position yet when I know I don't have any new data.
I'd also want to look at some 5, 10, and 20 years charts before I decided if the 18 month or 2 year change provided any sort of predictive capability.
For example, if you look at the history of the stock market, you can see certain patterns. But if you look at the gold market, there were similar patterns in the past, but then around the year 2000 the last major countries with strategic gold stockpiles sold them down, and the gold marke
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Maybe an oversupply will bring the prices down a bit from being gawdawfully high.
Good thing I wasn't drinking coffee while reading that, otherwise you'd owe me a new keyboard.
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I guess I'm not the only one that remembers the days when that 640K of RAM was a major portion of the cost of building a computer.... Hell, I remember just being amazed that I could buy a 32MB stick for $60!
Now, get off my lawn!
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I guess I'm not the only one that remembers the days when that 640K of RAM was a major portion of the cost of building a computer.... Hell, I remember just being amazed that I could buy a 32MB stick for $60!
Been there, done that... but on some memory sticks prices have tripled which is quite unusual for computer prices that have usually been on an everlasting downward spiral. I regret not getting 64GB when I had the chance, usually procrastinating is smart but in this case it was a real bummer. Oh well, not like 16GB is killing me.
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These noobs don't remember the days where RAM was well over $1 a MB.
Back when I upgraded my Atari ST I think I spent $300 for 512K.
I'm glad I missed the Altair days.
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$1/MB?? That's nothing -- I remember $7/KB. Seriously. I had to manually move chips (2 per KB) back and forth between RAM and video based on what I wanted to do.
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Well what will happen with current demand is the real question.
PC Sales are up again (most likely because their old PC which are now 7 and 8 years old now) are getting out of date. So people are getting new ones now. Thus more people may want the RAM faster then the supply.
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The rise of the basically disposable smartphone may have something to do with it. As VMs have become more popular, the amount of RAM needed in a server has gone up. "As much as you can afford" is the general rule for a VM server. People are also doing data analysis on larger and larger datasets. There is probably a very large combination of factors on the demand side.
These companies have co [wikipedia.org]
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As VMs have become more popular, the amount of RAM needed in a server has gone up.
And the number of servers needed has gone down more.
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you'd think that, right? but nah. there will just be another "fire" somewhere crucial to dram production.
__
i had the pun up there and everything, and didn't even notice til save that good ol' slashdot already had one queued-up. captcha: micron
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I've got a question (Score:2)
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Micron has ramped up its operating margin to as high as 50% so far in 2018 compared to 20% at the end of 2016
With that kind of profit taking, the fines and penalties would have to account for almost half their sales. For 2017 they exceeded $20 billion sales with gross revenue margin (profits) of $8 billion, those fines would have be near or above that to make them fear doing it again. It not called collusion, but it is. The problem is that dram companies are so entrenched it would take miracle new company with nothing to lose flooding the market to create price competition. As much as I don't trust china manufactu
Re: I've got a question (Score:1)
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Beware the MiSaHyCoin.
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Good (Score:3)
Maybe Apple will finally stop selling computers with only 4GB or 8GB RAM.
Programmers have solutions to the demand side (Score:2)
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Maybe Apple will finally stop selling computers with only 4GB or 8GB RAM.
That would conflict with making their laptops as thin as possible. More RAM means greater power draw and heat which limits thinness.
Huge wildcard: politics (Score:5, Interesting)
This [theregister.co.uk] El Reg article gives a good overview of just how messy the development of this PRC production capacity has been. They of course stole a lot of tech, in particular from Micron through UMC, and have added lawfare to the mix, a dubious lawsuit claiming patent infringement, and what I would guess is a much less dubious anti-trust price fixing action.
No doubt they expected Hillary to be President by the time this capacity came on-line, they'd owned the Clintons since Bill was governor of Arkansas and needed a bailout when the political machine he joined got a bit too greedy in raiding a state pension fund. Instead they got Trump, who's upping tarriffs to cover $200 billion worth of Chinese imports within 45 days, with a promised $500 billion to follow if they don't change their tune. [wikipedia.org] Going to get ugly....
DRAM isn't one thing (Score:3)
Look for an article contradicting this article within a few days. Fujian Jin Hua Integrated Circuit and Innotron Memory may supply "DRAM", but that doesn't mean they'll supply competitive DRAM for leading edge applications in volume in 2019. It's more complicated than more suppliers == oversupply.
If DRAM were easy to make then there would be a lot of competitive suppliers and low margins instead of 3 suppliers making high margins.
This article may be correct. It's more likely incorrect (or a mixed bag of correct/incorrect).
Micron stock is up today, so markets aren't taking it too seriously.
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The tariffs are only on trade between the PRC and the US, and since Samsung and SK Hynix in Korea have over 80% of the DRAM market, Micron's 17% probably isn't that significant. (Figures from here [statista.com].)
Micron's share hasn't really increased (Score:2)
Likewise, Samsung's 50.2% quarter was an outlier. They've been holding pretty steadily around 45% since 2015.
In fact, the most striking this is how the big three (Samsung, SK Hynix (Hyundai Electronix), and Micron) have come to dominate, shrinking the market share of the bit players from over 10% in 2011 down below 5% today.
You keep using that word... (Score:2)
I don't believe "oversupply" is the word to use here.
It's real hard to have too much of a commodity. If there is an "oversupply" of pork then people will eat pork instead of beef or chicken, therefore the "oversupply" goes away before it even happens. If there is an "oversupply" of cement then prices come down, people start to think they'd like a new driveway, cities build more roads, and the "oversupply" disappears.
With DRAM this just means that smartphones, computers, and TV sets, will have more DRAM fo
that's one way to put it (Score:1)
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Ummm, no? I don't remember it (it would be a really big thing, enough to cost them the opportunity to build or upgrade a fab line), couldn't find it using Bing or Google.