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Why Micron expects mobile DRAM to be future growth catalyst

Smita Nair

Must-know overview of Micron Technology: A DRAMatic growth story (Part 3 of 8)

(Continued from Part 2)

DRAM growth

Micron said mobile DRAM products accounted for a significant majority of its wireless solutions group sales in the second quarter of fiscal 2014. Management added on the earnings call that it’s seeing continued impressive memory growth in the low- and mid-price phone segments, as a number of customers announced products with 2 gigabytes of mobile DRAM—a density historically found only in high-end smartphones.

DRAMeXchange said Micron’s fourth quarter mobile memory market share was around 23%, nearly the same as the previous quarter’s figure. Micron’s mobile DRAM revenues are mainly generated from the orders Elpida received from its largest client, Apple (AAPL). In addition to its smartphone and tablet products, Apple’s MacBook Air also uses LPDDR3, with a much higher content per unit, and this could benefit Micron. The research firm estimated that Micron and Elpida’s merger will strengthen its mobile memory product portfolio. eMCP (embedded multi-chip package) memory production will be an especially important development, and “Micron’s mobile memory business is expected to grow by leaps and bounds in 2015.”

DRAMeXchange said for 2Q14, smartphone shipments are projected to grow 5.2% compared to the previous quarter. IDC also sai smartphone shipments exceeded 1 billion units in 2013 and are forecasted to reach 1.7 billion units by 2017. DRAMeXchange estimated that by 3Q14, LPDDR3 is expected to officially replace LPDDR2 as the main mobile DRAM in the industry. The research firm added the transition from LPDDR2 to LPDDR3 is expected to be completed by the end of this year. LPDDR2′s high demand is causing various disruptions to the supply chain, leading to supply shortages that could continue into the third quarter. Its analysis of the three major market players showed that Samsung and Micron have incorporated LPDDR3 in the majority of its products. It said SK Hynix was the major beneficiary of the rising mobile DRAM prices, as it has the highest LPDDR2 output ratio out of the three major DRAM manufacturers. The research firm expects ASP for mobile DRAM to remain flat going forward.

There is also talk about move to next-generation memory standard for mobile, namely the low-power DDR4 (LPDDR4) technology. LPDDR4 is the next-generation mobile DRAM interface that features ultrahigh speed and low power consumption and is targeted at high-end smartphones and tablets. Micron had highlighted the usefulness of the LPDDR4 DRAM Memory technology in a presentation last year. The company has also seen increasing speculation that its main customer, Apple (AAPL), could feature LPDDR4 in its future line of products. Micron management said in an analyst conference in February, “Just before Christmas we sampled LPDDR4, the first in the industry to sample to our chipset customers and to the OEMs.”

Reynette Au, vice president of Wireless Solutions Marketing at Micron Technology, said in a Wireless Week article last month, “Since the introduction of the iPhone, the industry has responded with an evolutionary transition from 2.6 GB/s LPDDR1, to 8.5 GB/s LPDDR2, to 17 GB/s LPDDR3, the technology currently is powering today’s high-end devices in volume production. DRAM bandwidth has roughly doubled with each generation to keep pace with demand.” She added, “The next generation of low-power DRAM (LPDRAM)—also known as LPDDR4—addresses these constraints by doubling the bandwidth of LPDDR3 while maintaining power neutrality.”

However, Micron rivals Samsung (SSNLF) and Hynix (HSXCF) seem to have marched ahead with LPDDR4 products. Samsung said in December that it has developed an 8Gb low-power double data rate 4 (LPDDR4) mobile DRAM. The 8Gb LPDDR4 is fabricated on 20 nanometer–class process technology, and offers 1 gigabyte (GB) on a single die, which is the largest density available for DRAM components. Overall, the new LPDDR4 interface will provide 50% higher performance than the fastest LPDDR3 or DDR3 memory and also consume approximately 40% less energy, at 1.1 volts. Samsung said it started offering the thinnest and smallest 3GB LPDDR3 (6Gb) package solutions in November and will provide its new 8Gb LPDDR4 DRAM in 2014. The company expects 8Gb mobile DRAM chip to rapidly expand the market for high-density DRAM in next-generation mobile devices.

Hynix too said it has developed an 8GB LPDDR4 using the advanced 20 nanometer class technology. Hynix said it has been strengthening its cooperation with customers for the standardization of this new mobile DRAM by providing the samples of LPDDR4 to major customers and SoC (system on chip) companies. The new interface LPDDR4 is expected to load onto flagship mobile devices at the end of 2014 and is anticipated to be commercialized regularly from 2015. Hynix expects LPDDR4 to be the main product in the industry from 2016.

Gartner estimated that worldwide semiconductor revenue totaled $315.4 billion in 2013, a 5.2% increase from 2012 revenue of $299.9 billion. Memory, especially DRAM, led this growth—not due to strong demand but rather to weak supply growth, the firm said. Intel maintained its leading market share, despite a 2.2% revenue decline. SK Hynix and Micron Technology benefited the most from the strong memory market, propelling them both into the top five for the first time, Gartner said.

Continue to Part 4

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