Market Signals
Unfavorable factors like the negative growth of the Chinese smartphone market and the declining PC market have led to growing oversupply in the global memory semiconductor market.
[[{"fid":"12791","view_mode":"body_image_right","fields":{"format":"body_image_right","field_file_image_alt_text[und][0][value]":"The semiconductor equipment market is forecast to grow the most in Taiwan, and the least in Europe.","field_file_image_title_text[und][0][value]":""},"type":"media","link_text":null,"attributes":{"alt":"The semiconductor equipment market is forecast to grow the most in Taiwan, and the least in Europe.","height":450,"width":450,"class":"media-element file-body-image-right"}}]]According to semiconductor e-commerce site DRAMeXchange on Sept. 9, the price of DRAM for PCs and for servers in Aug. decreased by 7 to 8 percent month-on-month. The price of NAND (MLC 64Gb) in late Aug. also fell by 6 to 7 percent compared to early Aug. NAND flash has suffered the biggest decrease in price over the last three months.
After 32 months of growth, the global NAND flash memory market posted negative growth to reach US$3.77 billion in June, and the market shank again to US$3.35 billion in July, according to World Semiconductor Trade Statistics.
In particular, the negative growth of the world's largest smartphone market is fueling anxiety. Data compiled by research firm Gartner in Aug. shows that the sales volume of smartphones in China contracted by 4 percent in the second quarter of this year, and so the Chinese smartphone market recorded negative growth for the first time.
Some in the industry say that this trend will continue for a long time due to semiconductor companies' further investment in facilities. Samsung Electronics is building the world's largest semiconductor complex in Pyeongtaek, Gyeonggi Province, with a 1.56 billion won (US$1.31 million) investment. SK Hynix is going to mass produce 20 nm DRAM in the M14 facility in Icheon, Gyeonggi Province, starting in 2016. In the NAND flash field, Samsung, Toshiba, and Micron Technology are expected to fiercely compete with each other to take the initiative in a 10-nanometer-class production process and 3D NAND, and they are likely to adopt an aggressive pricing strategy as a result.
To date, only Samsung has mass produced all NAND flash memory in the form of 10-nm-class NAND or 3D V-NAND, but the weight of NAND suppliers’ mass production of 10-nm-class NANDs will reach 80 percent in Q4 this year, according to DRAMeXchange.
However, many in the industry think that it is difficult to talk about demand and supply in semiconductors for the next two to three years, owing to the characteristics of the ever-changing semiconductor market. Park Yu-ak, an analyst at Meritz Investment Bank, said, "Samsung has yet to decide what kinds of products will be made in its semiconductor complex in Pyeongtaek," adding, "So, it is too early to link the enlargement of facilities with oversupply in two or three years."