The memory market, especially key memory products such as DRAM and NAND Flash, is an important driver for the growth of the semiconductor market. In recent years, with the explosive growth of data volume and the rapid development of emerging technologies such as cloud computing, big data, and artificial intelligence, the demand for memory has continued to rise. Memory manufacturers have effectively driven the overall growth of the semiconductor market through technological innovation, capacity expansion, and market share gain.
Memory makers such as Samsung, SK hynix and Micron Technology have seen significant revenue growth in multiple quarters. The growth of these companies is not only due to the overall prosperity of the memory market, but also closely related to their strengths in technology research and development, product innovation and supply chain management. Technological innovation: Memory manufacturers continue to invest in R&D resources to drive innovation and development in storage technology. For example, by increasing storage density, reducing power consumption, and increasing read and write speeds, we continue to meet the market demand for high-performance, low-power storage solutions. In addition, memory manufacturers are expanding their production capacity to meet market demand. This not only helps to increase market share, but also reduces production costs and increases profitability through economies of scale.
Figure: Semiconductor industry trends in the first quarter of 2024 (Source: IDC)
High-bandwidth memory (HBM) is four to five times more expensive than traditional memory, and as demand grows, it not only squeezes the supply of DRAM in the device market, but also pushes up its price, which in turn significantly boosts the overall memory market's revenue. At the same time, the memory demand for AI PCs and AI smartphones is much higher than that of traditional devices, which is also further driving the memory market. In the current quarter, three of the world's top five IDM (integrated equipment manufacturing) suppliers are mainly engaged in memory business, accounting for nearly half of the revenue share of the top 10 suppliers.
These top 10 suppliers include Samsung, Intel, SK hynix, Micron, Infineon, Texas Instruments, STMicroelectronics, NXP, Sony, and Murata. With the growing demand for AI technology in the data center and equipment market, memory is expected to continue to be one of the important drivers of IDM development in the second half of 2024 (2H24).
In the first quarter of 2024 (1Q24), the computing sector remains the dominant area for IDM applications, accounting for 35% of the total market share, up significantly from 29% in the same period last year. This is followed by the wireless communications market. The automotive market was weak under chip inventory pressure, while the industrial market focused on destocking as customers added two orders and stockpiles during supply chain disruptions last year. As a result, the share of these two markets has declined significantly compared to the same period last year. They are expected to prioritize inventory adjustments in the first half of 2024 (1H24) and usher in a recovery in the third quarter.
Helen Chiang, Head of Semiconductor Research, Asia Pacific, IDC, said, "In 2024, memory manufacturers will continue to play a key role in the global IDM market. Demand in the automotive and industrial sectors is expected to rebound in the second half of the year as inventory levels gradually return to normal, which will help drive the growth of the IDM market.”
