Memory Prices Drive Samsung's Record Q2 Profit

Release time：2017-07-11
author：Ameya360
source：Dylan McGrath
reading：1223

　　South Korean electronics powerhouse Samsung Electronics Co. Ltd. said Friday (July 7) it expects to record a record profit of about 14 trillion Korean won (about $12.1 billion) for the second quarter as surging memory chip prices boost the company's bottom line.

　　Samsung (Seoul) said it expects its profit to increase 72 percent compared with the second quarter of 2016. The firm said sales rose to an estimated 60 trillion won (about $52 million), an increase of 18 percent compared with the year ago period.

　　Memory chip prices have been on the rise since late last year as tight supply in DRAM and NAND flash memory have chip vendors scrambling to add capacity. Flash memory chips are also finding uses in more applications, such as consumer electronics and solid state drives, leading to higher consumption.

　　According to DRAMeXchange, a market research firm that tracks memory chip pricing, there is no easing of DRAM and NAND undersupply on the immediate horizon. The firm predicts that DRAM average selling prices will rise another 5 percent in the third quarter, while the average selling price of NAND chips surged by 20 to 25 percent in the first quarter.

　　Samsung said earlier this week that it plans to invest $18.6 billion in semiconductor and display production facilities. The company also said its newest chip fab line in Pyeongtaek, South Korea, began mass production and has shipped its first product to customers.

　　Market watchers expect the surging memory prices in 2017 will enable Samsung to displace Intel Corp. from the No. 1 spot in semiconductor sales. Intel has been No. 1 in chip sales for more than two decades.

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What is a memory chip? What are the types of memory chips?
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What is a memory chip? What are the types of memory chips?

　　Memory chips are the main components used for storage In the realm of computing and digital devices, and play a very important role in the entire integrated circuit market.　　These chips serve as the foundation upon which our digital world operates, facilitating the storage and retrieval of information in devices ranging from smartphones and laptops to complex servers and embedded systems.　　What is a memory chip?A memory chip, fundamentally an integrated circuit (IC), is a crucial electronic component designed to store, retrieve, and manage data within a digital device. These chips come in various types and configurations, each tailored to serve specific purposes within electronic systems.　　What are the types of memory chips?RAM (Random Access Memory): One of the most common types of memory chips, RAM is volatile memory used by computers to temporarily store data that the CPU needs quick access to during operation. It enables swift read and write operations, facilitating multitasking and overall system performance.　　ROM (Read-Only Memory): Unlike RAM, ROM is non-volatile memory, meaning it retains data even when the power is turned off. ROM is commonly used to store firmware and permanent instructions essential for booting up devices and initializing hardware components.　　Flash Memory: This non-volatile memory type finds its application in devices like USB drives, Solid State Drives (SSDs), memory cards, and embedded systems. Flash memory allows for both reading and writing operations, making it suitable for storing files, applications, and operating systems.　　EEPROM (Electrically Erasable Programmable Read-Only Memory): EEPROM combines the qualities of both volatile and non-volatile memory. It’s rewritable and often used in smaller capacities to store configuration settings and small amounts of essential data.　　What are the applications of memory chips?The ubiquity of memory chips spans across an extensive array of applications and devices, playing a pivotal role in their functionality:　　• Computers and Laptops: RAM enables quick access to data during computations, while ROM stores firmware and BIOS instructions essential for system startup.　　• Smartphones and Tablets: Memory chips in these devices handle data storage for applications, media files, and the operating system, ensuring smooth multitasking and user experience.　　• Digital Cameras and Camcorders: These devices utilize memory chips to store photos, videos, and settings, allowing users to capture and retain precious moments.　　• Embedded Systems and IoT Devices: Memory chips facilitate the functioning of embedded systems and IoT devices, managing data crucial for their operations in various industries like healthcare, automotive, and home automation.　　How to make a computer chip?The creation of a memory chip involves intricate processes conducted in specialized semiconductor fabrication plants. The process can be summarized in several key steps:　　Design and Layout: Engineers meticulously design the chip’s layout, determining the arrangement and connections of transistors and circuits.　　Lithography: A crucial step where the chip’s design is imprinted onto a silicon wafer using photolithography techniques.　　Etching and Doping: Unwanted portions of the silicon wafer are removed, and specific regions are doped with materials to alter their conductivity and create the desired electronic components.　　Layering: Multiple layers of conductive and insulating materials are deposited onto the wafer to form intricate circuitry.　　Testing and Packaging: The fabricated chips undergo rigorous testing to ensure functionality and quality. Once validated, they are packaged into final products for integration into various devices.　　What is the difference between a logic chip and memory chip?While both logic and memory chips are essential components of electronic systems, they serve distinct functions:　　Logic Chip:　　A logic chip is designed to perform computational tasks, execute instructions, and manage the flow of data within a digital device. These chips contain integrated circuits that implement logical operations, arithmetic calculations, and control functions. They are the brains of a system, carrying out operations based on instructions received from software or firmware.　　Examples of logic chips include Central Processing Units (CPUs), Graphics Processing Units (GPUs), microcontrollers, and Application-Specific Integrated Circuits (ASICs). CPUs, for instance, process data, perform calculations, and execute instructions, while GPUs specialize in handling graphics-related tasks.　　Memory Chip:　　In contrast, a memory chip is specifically dedicated to storing and retrieving data. These chips don’t perform computational or logical operations but instead focus on holding information temporarily or permanently within a system. Memory chips are responsible for enabling the storage and retrieval of data for various purposes, such as program execution, data manipulation, or long-term storage.　　Types of memory chips include Random Access Memory (RAM), Read-Only Memory (ROM), Flash Memory, and Electrically Erasable Programmable Read-Only Memory (EEPROM). RAM, for example, stores data temporarily while the system is running, allowing quick access for the CPU to carry out operations. ROM holds essential instructions and data that remain intact even when the power is turned off. Flash memory is used for non-volatile storage in devices like USB drives and SSDs, while EEPROM allows for rewritable non-volatile storage in smaller capacities.　　How long does a memory chip last?　　The longevity of memory chips varies based on usage, quality, and environmental factors. Under normal operating conditions, these chips can last for many years, potentially even decades. However, excessive usage, high temperatures, or voltage fluctuations may impact their lifespan.
2023-11-20 14:33 reading：1446
Shortage of Intel CPU to Impact Notebook Shipments, Causing Further Price Decline in the Memory Market
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Shortage of Intel CPU to Impact Notebook Shipments, Causing Further Price Decline in the Memory Market

TrendForce has adjusted its 2018 global notebook shipments projection downwards due to the worsening shortage of Intel CPUs. Intel originally planned to begin mass production of CPUs based on its latest Whiskey Lake platform in 3Q18, when the notebook market would be in the busy sales season. However, PC-OEMs are now finding an insufficient supply of Whiskey Lake CPUs, which has disrupted vendors’ notebook shipment plans for this year’s second half. Therefore, TrendForce now estimates that this year’s total notebook shipments will drop by 0.2% YoY, and the CPU shortage may further impact the entire memory market as well.The precise reason behind the shortage of Intel CPUs is currently unclear because the problem simultaneously affects the newly arrived CPU product lines and product lines that have been in the market for some time. The affected products include the improved version of 14nm++ and product lines based on the 14nm+ Coffee Lake platform, which has been in mass production for half a year and is one of the solutions for mainstream models in the notebook market. The lack of supply for existing CPU product lines is having a significant impact on the notebook market as a whole. TrendForce estimates that the CPU supply gap in the notebook market has increased from around 5% in August to 5-10% in September. There is a possibility that the supply gap may extend to over 10% in 4Q18, and the shortage is expected to be resolved rather later in 1H19.DRAM prices to slide, with PC DRAM anticipating larger price decline due to the CPU shortageTrendForce notes that the CPU shortage is expected to impact the entire memory market as well. DRAM prices are now approaching an inflection point after climbing for nine successive quarters. DRAMeXchange, a division of TrendForce, previously estimated that the contract prices of PC DRAM products will drop by around 2% QoQ in 4Q18 as the market gradually shifts into oversupply. However, it is now possible that the price decline will become larger due the shortage of Intel CPUs and lower demand for notebooks and PC DRAM in a row.On the other hand, the impact of the CPU shortage may also expand to the NAND Flash market. The insufficient supply would cause PC OEMs’ lower expectations of notebooks demand in the upcoming busy season, thus affecting the demand for SSD in the second half of this year. Therefore, TrendForce expects the SSD price decline to be steeper in 4Q18 than in this quarter.With regard to the server market, the migration from the Grantley to the Purley platform is currently taking place. According to TrendForce’s survey, a minority of server OEMs are experiencing longer lead time in the deliveries of Purley processors. This issue will be followed up because it will affect future server shipments if it becomes more widespread. Moreover, both the NAND Flash and DRAM markets are much more vulnerable to the falling demand from the server application than from the PC or notebook application. Therefore, downward corrections of demand for server memory products will cause a steeper drop in quotations of memory products as a whole.
2018-09-13 00:00 reading：1327
China will take a 'long time' to catch up to memory chip rivals, industry expert says
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China will take a 'long time' to catch up to memory chip rivals, industry expert says

Even as China doubles down on its efforts to dominate the memory chip industry, its domestic companies continue to lag behind the global competition, an industry executive told CNBC on Thursday.The semiconductor industry has been around for decades, but it is poised for another round of growth due to the emergence of new technologies like artificial intelligence and the fifth-generation of mobile networks, according to Lung Chu, president of SEMI China."There's a lot of opportunities in semiconductor," Chu told CNBC's Eunice Yoon at the Morgan Stanley Technology, Media and Telecom Conference in Beijing.In 2014, the Chinese government issued guidelines for the development of China's semiconductor industry through innovation and investments, he explained. "There's evidence that money has been put in but I think it will take a long time for China to catch up with the global leaders."SEMI is a global association for the semiconductor industry, and is present in countries such as the United States, China and South Korea.Last year, global semiconductor revenue topped $400 billion, according to research firms Gartner and IHS Markit. The latter said worldwide revenue grew 21.7 percent and reached $429.1 billion in 2017. The industry is dominated by the likes of Samsung Electronics, Intel, SK Hynix, and Qualcomm.Chu said China was responsible for more than half of the global consumption in the chip industry, yet Chinese local suppliers meet only about 13 percent of the domestic demand. According to Chu, that means Beijing has a massive trade deficit in this space."That's a major concern for the government, for the economy, but it's also a great opportunity for local companies to get into the (integrated circuits) business," he said. "That's the driving force as to why China wants to do more."As part of its Made in China 2025 goals, Beijing wants to have have locally produced chips used in smartphones to make up about 40 percent of the domestic market by 2025, in a move to cut down its reliance on imports. The country's dependency on foreign chips was highlighted when the United States imposed a supplier ban on Chinese telecommunications equipment maker ZTE, which crippled its business.China has raised multiple funds for semiconductor development since 2014, with contributions from government-backed enterprises and industry players to push local companies to develop their own chips that can rival the global competition, according to various reports. Beijing's involvement in the development of its semiconductor industry has been one of the main complaints from the U.S. over China's technology practices.Amid the ongoing trade war between China and the U.S., Chu said many companies in the semiconductor space are worried about investing in the Chinese market."However, because the market is here, the customer is here, the China strategy has to be part of the global strategy or the corporate strategy," he said.
2018-08-31 00:00 reading：1213
Memory ICs to Account for 53% of Total 2018 Semi Capex
Trade news

Memory ICs to Account for 53% of Total 2018 Semi Capex

IC Insights forecasts total semiconductor capital expenditures will rise to $102.0 billion this year, marking the first time that the industry has spent more than $100 billion on capital expenditures in one year.  The $102.0 billion spending level represents a 9% increase over $93.3 billion spent in 2017, which was a 38% surge over 2016.Figure 1 shows that more than half of industry capital spending is forecast for memory production—primarily DRAM and flash memory—including upgrades to existing wafer fab lines and brand new manufacturing facilities. Collectively, memory is forecast to account for 53% of semiconductor capital expenditures this year.  The share of capital spending for memory devices has increase substantially in six years, nearly doubling from 27% ($14.7 billion) in 2013 to a forecast of 53% ($54.0 billion) of total industry capex in 2018, which amounts to a 2013-2018 CAGR of 30%.Figure 1Of the major product categories shown, DRAM/SRAM is forecast to show the largest increase in spending, but flash memory is expected to account for the largest share of capex spending this year (Figure 2).  Capital spending for the DRAM/SRAM segment is forecast to show a 41% surge in 2018 after a strong 82% increase in 2017.  Capital spending for flash memory is forecast to rise 13% in 2018 after a 91% increase in 2017.Figure 2After two years of big increases in capital expenditures, a major question looming is whether high levels of spending will lead to overcapacity and a softening of prices.  Historical precedent in the memory market shows that too much spending usually leads to overcapacity and subsequent pricing weakness.  With Samsung, SK Hynix, Micron, Intel, Toshiba/Western Digital/SanDisk, and XMC/Yangtze River Storage Technology all planning to significantly ramp up 3D NAND flash capacity over the next couple of years (and new Chinese memory startup companies entering the market), IC Insights believes that the future risk for overshooting 3D NAND flash market demand is high and growing.
2018-08-30 00:00 reading：1060
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