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5G Communications and Cloud Services Likely to Lead Chip Market Growth Next Year
DRAM, NAND Sales Forecast to Grow 12%, 19% in 2020
5G Communications and Cloud Services Likely to Lead Chip Market Growth Next Year
  • By Kim Eun-jin
  • December 20, 2019, 08:54
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The global DRAM and NAND flash sales are expected to grow 12 percent and 19 percent in 2020, respectively.

Global market research firms are forecasting that the global NAND flash demand will increase next year based on solid state drive (SSD) density and performance enhancement and 5G communications, artificial intelligence, deep learning and virtual reality will lead the growth of the global DRAM and NAND flash markets next year.

According to their recent reports, the global DRAM and NAND flash sales are expected to grow 12 percent and 19 percent in 2020, respectively. The World Semiconductor Trade Statistics recently mentioned that the memory chip sector and the global semiconductor market as a whole would grow 4.1 percent and 5.9 percent next year, respectively. The positive outlook is based on an increase in demand for mobile chips for 5G services and an increase in demand for server chips related to the release of the Intel Ice Lake CPU.

According to DRAMeXchange, the mobile chip demand accounted for 32 percent of the total DRAM demand last year and the ratio is expected to increase to 34 percent this year and 37 percent next year. This is because the iPhone 12 will debut next year with a 5G chip and Huawei, the second-largest smartphone manufacturer in the world, is concentrating on 5G smartphones. Kiwoom Securities is estimating the global 5G smartphone sales for 2020 at 177 million units, the high-end mobile DRAM demand growth at 45 percent, and the overall mobile DRAM demand growth at 22 percent.

The server memory chip market is likely to show a substantial recovery in the second half of next year, when Intel will release the Ice Lake as its next-generation CPU for use in servers. Intel is currently testing the CPU with memory semiconductor companies such as Samsung Electronics.

It has turned out that U.S.-China trade disputes have had a positive effect on South Korean semiconductor companies in that China Manufacturing 2025 for a self-sufficiency rate of 70 percent in the semiconductor industry has been hindered by semiconductor manufacturing equipment export restrictions of the United States. According to Bloomberg, ongoing semiconductor projects in China add up to US$243 billion, and yet the Chinese government is having a hard time providing more assistance due to a decline in tax revenue attributable to the disputes.