Storage industry inflection point to the second half of the year will welcome recovery
The semiconductor industry includes subsectors such as integrated circuits, optoelectronic devices, discrete devices, sensors, etc., of which integrated circuits can be subdivided into memory, logic circuits, analog circuits, microprocessors and other fields according to their functions. Memory chips are one of the core semiconductor components and can be divided into different types according to their nature. According to whether the data can continue to be stored in the device after power-down, memory chips can be divided into power-down volatile and power-down non-volatile two kinds of memory chips, which volatile memory chips mainly contain static random access memory (SRAM) and dynamic random access memory (DRAM); non-volatile memory mainly includes programmable read-only memory (PROM), flash memory (Flash) and erasable programmable Programmable Read-Only Memory (PROM), Flash Memory (Flash) and Erasable Programmable Read-Only Register (EPROM/EEPROM).
figure1：types of memory chip
According to the World Semiconductor Trade Statistics (WSTS), the global semiconductor industry reached $555.9 billion in 2021, up 26% year-on-year. Among them, the memory segment track accounted for 28%, with a market size of $153.8 billion, a year-on-year growth of 31%, which is the largest sub-sector of the semiconductor market. In addition, in 2021, the global optoelectronics, discrete devices, sensors market size of 42.404, 30.337, 19.149 billion U.S. dollars, accounting for 8%, 5%, 3%, respectively. As for the global semiconductor storage market, DRAM and NANDFlash are the two main types of storage chips, occupying a dominant position. Among them, DRAM will account for about 56% and NANDFlash will account for about 41% in 2021. Other forms of storage products, such as small-capacity storage represented by NOR Flash, account for about 2%.
Storage chips as the vane of the semiconductor industry, showing a strong cyclicality, the industry boom degree by the supply and demand relationship has a greater impact on the boom degree is high, the manufacturers to expand production capacity in order to increase revenues, easy to lead to oversupply, and in the downturn in the degree of contraction of production capacity, price reductions to clean up inventories, and ultimately lead to the market supply exceeds demand. In addition, the storage market has long-term growth, with the rapid development of artificial intelligence, IoT, cloud computing and other industries, the long-term market size of the entire storage industry continues to rise.
In 2022, under the influence of the deterioration of the macroeconomic environment and geopolitical factors, the global consumer electronics market demand has declined significantly, and the high inventory of terminals, channels, and original manufacturers has further suppressed the demand for storage products. According to CFM Flash Memory Market forecast, the storage market size is expected to grow quarter by quarter in 2023Q2. In terms of storage capacity, the NAND Flash market capacity scale will grow 6% to 610 B GB in 2022; the DRAM storage capacity scale will grow 4% to 194 B Gb. With the gradual improvement in demand in 2023, it is expected that the NAND and DRAM storage capacity scales will grow 20% and 10% year-on-year, respectively.
Demand Side: Storage Industry Rebounds, AI Servers Drive Demand Growth
At present, the storage industry downstream market accounts for a large proportion of smartphones, servers, PCs and so on. According to CFM flash memory market data, in 2021, among the downstream applications of DRAM, smartphones, PCs, and servers account for 35%, 16%, and 33%, respectively; among the downstream applications of NAND, cell phones, cSSDs, eSSDs, and memory cards/UFDs account for 34%, 22%, 26%, and 9%, respectively.
figure2：the outlook of memory chip market 2021
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Cell phones: a modest rebound expected in the second half of the year
In 2019-2022, the overall ups and downs of global smartphone shipments will be small and stable at around 1.2-1.4 billion units: domestic smartphone shipments have continued to decrease since 2016, and achieved a significant rebound of 15.93% in 2021, while the domestic cell phone market will continue to shrink in 2022 due to the impact of epidemics, the lengthening of the replacement cycle and other unfavorable factors.In 2023, with the increase in the popularity of overseas In 2023, with the increase in the popularity of low-end and mid-range 5G cell phones, inflationary good governance and the relaxation of China's epidemic control and other factors, global and domestic smartphone shipments are expected to rebound.
The growing average capacity of cell phones will boost storage demand. As the difference between old and new smartphones has gradually narrowed in recent years, consumers have been switching to longer and longer cycles, and demand for high-capacity models has become stronger. High-end flagship cell phones continue to improve product performance and storage capacity based on brand positioning and sufficient profit margins. The latest flagship cell phones launched by major cell phone manufacturers, such as Xiaomi 13 Pro, OPPO Find N2, Vivo X90 Pro and Glory 80 Pro, generally adopt UFS3.1/UFS4.0 and LPDDR5/LPDDR5X technologies, and their storage capacity has reached 256GB and above. The storage capacity generally reaches 256GB and above, and the proportion of high-end smartphones equipped with storage capacity of 256GB or above is gradually increasing.
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PC：Global PC shipments fall 33% in Q1, recovery expected in H2
PC: Global PC shipments fall 33% in Q1, recovery expected in H2. According to Canalys, total global PC shipments fell 33% to 54 million units in 2023Q1, reaching a double-digit annual decline for the fourth consecutive quarter. The current PC demand is still weak, with Asus, Lenovo, Xiaomi as the representative of the mainstream PC vendors sales decline, inventory water level rose in 2022Q2 hit a new high of inventory turnover days, the overall industry inventory is still not back to a healthy state, 2023 with the gradual recovery of demand, inventory is expected to return to normal levels.
Figure 3: Changes in inventory turnover days by PC vendor
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Server: Short-term demand under pressure, shipments expected to recover in the second half of the year
2022H2 Major cloud service purchasers AWS, Azure, Google and Meta all saw a slowdown in business revenue growth, with AWS slowing to 27.5% in 2022Q3, the lowest since 2014, and Azure's growth slowing to 35%, as the server market begins a round of inventory adjustments that are expected to last until the end of 23Q2. However, due to the positive overall growth outlook for AI and cloud computing, the CFM flash memory market expects server shipments to grow 3% year-over-year in 2022 at 13.3 million units, and is expected to return to a 5% growth rate in 2023.
HBM (High Bandwidth Memory) is a new DRAM solution based on the 3D stacking process. HBM enables DRAM to transform from traditional 2D to stereoscopic 3D, fully utilizing the space and reducing the area, breaking through the memory capacity and bandwidth bottleneck. HBM is mainly chip stacking through silicon through-hole (TSV) technology to increase throughput and Overcome the limitation of bandwidth within a single package by vertically stacking several DRAM dies. By increasing bandwidth and expanding memory capacity, models and parameters are kept closer to the core computation, thus reducing latency. In the future, application markets such as artificial intelligence, machine learning, high-performance computing, and data centers will place higher requirements on bandwidth, continuing to drive the iterative development of HBM.
Benefiting from the outbreak of AI applications, the AI server market is expected to continue to expand.TrendForce data, AI servers 2022-2026 CAGR of 10.8%, to 2026 AI server annual shipments are expected to reach about 200,000 units. In addition, with the growing demand for high computing power in AI technology, HBM chips are expected to rapidly release volume. According to Omida, the HBM market size was $500 million in 2019, and the market size is expected to reach $2.5 billion by 2025.
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Automotive electronics: electrification and intelligentization of automobiles are expected to boost demand for in-vehicle storage
According to the data of China Association of Automobile Manufacturers (CAAM), the shipment of new energy vehicles in China will grow from 517,000 units in 2016 to 7,058,000 units in 2022, with a CAGR of 54.6%. According to Micron data, growing demand for next-generation IVI systems and more advanced driver assistance systems, among others, will drive strong growth in the automotive storage market in 2023. Specifically, with the development of autonomous driving from L1 to L5, the demand for automotive local storage for in-vehicle smart chips, T-BOX, GW, LCD dashboards, DVRs, and EDRs is increasing, and the demand for vehicle-mounted sensors such as cameras, LIDARs, and thermal imaging will continue to grow to meet the need for data collection, exchange, and real-time information sharing, thus driving the size of the automotive storage market to grow. This will drive the growth of the automotive storage market, which is expected to reach $20 billion in 2030, with the biggest driving force coming from the development of IVI infotainment systems and ADAS.
Supply side: major storage factories to reduce capital expenditure, storage chip supply and demand relationship is expected to improve
As downstream demand continues to be sluggish, Hynix, Micron, Macron, Huabang Electric and other major storage chip makers have cut back on capital expenditures and lowered capacity utilization, and supply and demand is expected to continue to improve in the future as major storage manufacturers take the initiative to go to the inventory and reduce production.
Sales side:
2022Q4 Samsung storage division revenue was 12.14 trillion KRW, down 38% YoY and 20% YoY. 2022Q4 Samsung DS division operating profit was 0.27 trillion KRW, down 97% YoY and 95% YoY.
图5：2021Q4-2022Q4三星DS部门利润
2023Q1 SK 海力士营收 5.09 万亿韩元，同比下降58%，环比下降34%，其中，NAND 业务收入占比 33%，约 1.68 万亿韩元；DRAM业务收入占比58%，约2.95 万亿韩元。营业利润为-3.4 万亿韩元，净利润-2.59 万亿韩元。
美光 FY2023Q2 季度营收 36.93 亿美元，同比下降53%，环比下降10%。其中DRAM 收入 27.22 亿美元，占营收 74%，同比下降52.4%，环比下降3.8%。DRAM Bit 出货量环比增长约 15%，DRAM ASP 环比下降约20%。NAND 收入 8.85 亿美元，占总营收 24%，同比下降54.8%，环比下降19.8%。NAND Bit 出货量环比增加约 5%~10%，NAND ASP 环比下跌约25%。美光预计23 年 DRAM Bit 需求增长放缓至 5%左右，NAND Bit 需求增长在低双位数百分比范围。
库存端：库存接近历史高点，2023Q2 有望逐步下降。截至2023Q1，海外存储大厂库存压力普遍较大，从库存水位来看，美光平均库存周转天数为235 天，库存减记后为 153 天，预计库存周转天数已经在该季度达到峰值，预计Q2 后库存有望逐步下降。
价格端：供需关系改善，加速价格拐点到来
DRAM：目前市场仍处于消费需求疲弱的局面，存储器厂商库存压力持续。由于海外多家供应商已开始积极减产，预计价格跌幅有望收敛。TrendForce预计2023Q2 DRAM 价格跌幅有望收敛至10~15%。
图6：主流DDR4现货平均价格走势（美元）
NAND Flash：目前 PC、手机端等市场需求仍处于萎缩阶段。在市场需求、通货膨胀等多种不确定因素的影响下，预测 NAND 在 2023 上半年仍处于供应过剩局面，价格存在继续下跌的可能。TrendForce 预计 2023Q2 NANDFlash 价格跌幅有望收敛至 5~10%。
综上，从需求端来看，存储芯片需求仍保持较低水平，而供给端来看，随着各大厂商主动去库存和减产，供需关系有望持续改善。基于目前供需关系，行业景气度位于底部区域，23H2 需求有望触底回升。
