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In the first quarter of 2021, the total output value of DRAM increased by 8.7% to 19.2 billion US dollars From TrendForce

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According to trendforce, DRAM (memory) demand in the first quarter of 2021 is stronger than expected, mainly including long-distance office and teaching to drive the demand of pen and TV. In addition, oppo, vivo and Xiaomi, the Chinese smart phone brands, are actively increasing their spare parts purchasing power to seize the market share gap of Huawei. Moreover, the demand for goods preparation of cloud server industry is gradually warming up. Even though the shortage of various parts and components, such as various types of IC and passive components, is frequent, the delivery performance of DRAM suppliers in the first quarter is still better than expected. As previously predicted, DRAM prices began to turn upward in the first quarter. With the simultaneous rise of shipment volume and quotation, DRAM’s total output value in the first quarter of 2021 rose to US $19.2 billion, an increase of 8.7% in the quarter.

As we enter the second quarter, the demand for products including PC, mobile, graphics and specialty DRAM will remain stable. In addition, after 2-3 quarters of inventory destocking for the server companies with weak pulling momentum, and the expectation that DRAM prices will continue to rise, some companies will restart a new round of stock up. Trendforce Jibang expects that the average unit price of original DRAM will rise significantly in the second quarter, and the overall DRAM output value growth rate will have a chance to exceed 20% in the quarter with the continued upward shipment.

DRAM prices reversed upward in the first quarter, pushing up the revenue performance of three original manufacturers

In terms of revenue performance, the shipping volume and average sales unit price of the three DRAM manufacturers also showed a trend of “both volume and price”, and the shipping growth was better than expected, which showed that the reverse quotation stimulated the buyers to actively prepare goods. Revenue of Samsung, SK Hynix and micron rose 8.5%, 6.9% and 9.6% respectively; However, the market share has not changed much, only Meguiar rose slightly to 23.1%. In the second quarter, the market share of the three largest original factories will not change significantly.

In terms of profit performance, although the average price of DRAM in the first quarter rose by 0-5%, the profit performance was also different due to the different transition time of advanced manufacturing processes of various manufacturers. For Samsung, due to its low yield at the beginning of 1znm mass production, the operating profit rate dropped from 36% in the fourth quarter of last year to 34%; Sk Hynix benefited from the improvement of the yield rate of the new process, which rose to 29% from 26% in the last quarter. The quotation of Meguiar in the quarter (December to February) is about the same as that of Korean factory, and its operating profit rate has also increased to 26% from 21% in the last quarter. On the whole, in the second quarter, it is estimated that the profitability of the original factory will make obvious progress, with the gradual maturity of 1znm yield, Samsung’s profit growth will be the most obvious.

DRAM demand improves, original factory accelerates capacity expansion plan in the second half of the year

In 2021, the three original manufacturers will gradually accelerate the planning of capacity or process transfer to meet the demand of terminal gradual upkeep. However, the new capacity will be mainly set in the first half of 2022, which has little impact on the DRAM market this year. From the perspective of the capacity of the three original plants, in order to meet the hot demand of niche special DRAM, Samsung not only slowed down the pace of the old line 13 from DRAM to CIS (image sensor), but also decided to expand the capacity of the latest p2l plant at the end of the year to cope with the improvement of demand.

Sk Hynix’s old factory M16 also slowed down the progress of DRAM to logic IC, and decided to advance part of the capital expenditure planning in 2022 to this year. At the end of the year, the new factory M16 has the opportunity to slightly increase, but this year’s DRAM bit increase is still mainly due to the increase in the proportion of 1ynm and 1znm processes. This year, Meguiar is still focusing on mass production of 1znm and 1 alpha nm processes and increasing the proportion of overall output. With the cost advantage, 1znm has become the main process of Meguiar and is widely used in all kinds of DRAM products; In addition, it has also started the next generation of 1 alpha nm product verification, and the process deduction speed is quite fast. And the total production capacity in the absence of new plant planning, investment will be roughly the same as last year.

The market of special DRAM is hot, and Taiwan manufacturers dynamically allocate their production capacity to meet the rising price

Taiwan’s performance is even better than that of the three original manufacturers. The main reason is that in this wave of DRAM price rise, the niche special DRAM took the lead and increased the most dramatically. Nanya tech was boosted by the price hike, and its revenue increased by 21.7% in the first quarter, while its operating profit margin improved significantly with the price hike, rising to 17.1% from 8.8% in the last quarter. Winbond’s overall order demand is still very stable. However, its special DRAM and NAND flash businesses performed better in the first quarter. With the help of the first improvement in the niche memory market, DRAM revenue also increased by 9% in the quarter. However, trendforce Jibang consulting believes that it is necessary for Huabang to join the mass production of Kaohsiung road bamboo factory in 2022 before it has the opportunity to ease the supply shortage. PSMC’s revenue only includes its own standard DRAM products, excluding DRAM OEM business. Its DRAM revenue grew by about 7% in the first quarter; If the total revenue of OEM is added up, the growth will reach 16%.

In the face of this wave of shortage, the three major manufacturers have taken advantage of the situation to transfer part of their production capacity to their most advantageous products, so as to maximize the production efficiency. For example, South Asia branch has transferred part of its 20nm production capacity from DDR4 to DDR3, because DDR3’s current profit level is better than DDR4. Huabang will focus on the limited DRAM capacity in the most niche small capacity products, because the product has a very high pricing voice in the market. Under the current situation that both logic IC and specialty DRAM are in high demand, the company dynamically allocates production capacity between them to optimize profits by increasing customers’ quotation.

More reading: trendforce: in 2015, the global DRAM output value in Q4 was US $10.27 billion, declining by 9.1% on a month on month basis, Ending the nine consecutive quarters of rising trend, the price of niche DRAM is expected to be flat in the third quarter, DDR3 has cost advantage and is still the mainstream in the short term trendforce: Global DRAM revenue in Q1 of 2017 increased by 13.4% trendforce: the average price of DRAM in the first quarter of 2021 will stop falling and stabilize Trend force: Q2 global DRAM price is expected to rise 18-23% in 2021 trendforce: the global DRAM output value in 2013 is about US $9.75 billion trendforce: the global DRAM module market total sales amount in 2013 is about US $7.3 billion trendforce: the monthly average price of the mainstream capacity of special DRAM will rise nearly 7% in February 2021

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