Industry Insiders Dismissive
Taiwan’s DigiTimes reported on March 31 that Korean semiconductor companies will stop accepting orders for DDR3 DRAMs beginning from 2023.
The report said that Samsung Electronics will receive orders for DDR3 DRAMs from customers by the end of 2022 and deliver them by the end of next year.
Samsung had led the DDR3 DRAM market until the mid-2010s. DDR3 DRAMs are used in networking products requiring no powerful chips such as set-top boxes (STBs), routers and modems. But the advent of DDR4 DRAMs in 2013 weakened DDR3 DRAMs’ position in the memory market. Currently, DDR4 DRAMs are being used for general purposes, but companies are speeding up the introduction of DDR5 DRAMs. Intel and AMD said that they will release new PC CPUs within this year that support DDR5 technology. Accordingly, Samsung Electronics and SK Hynix have drawn up plans to finish developing DDR5 products in line with the release of new server processors that support DDR5.
“Now demand for DDR3 DRAMs is exceeding supply as Korean DRAM manufacturers are reducing DDR3 DRAM production and focusing on high-performance and low-power DRAMs,” an industry insider said. As a generation change from DDR3 to DDR5 is underway, DDR3 supply is being reduced, triggering a DDR3 price hike.
Market research firm TrendForce predicted that DDR3 DRAM prices will rise by up to 5 percent in the second quarter of this year due to a rapid supply decline. It forecast that DDR3 prices, which had been on a downward curve until 2021, will rebound in the first quarter and continue to climb in the second quarter in 2022.
However, although Korean DRAM manufacturers are accelerating the reduction of DDR3 DRAM production, industry insiders believe that the shortfall is unlikely to be met by other companies. Taiwanese DRAM makers Nanya and Winbond are expanding their DDR3 DRAM production facilities, but their new production lines will go live beginning from 2023 or 2024. Chinese companies such as CXMT and Giga Devices still show poor production yields.
Due to a rapid generational shift to DDR5 DRAMs, the share of DDR5 DRAM shipments in the overall DRAM market is on a gradual rise. According to market researcher Omdia, the share of DDR5 shipments in the total DRAM market is expected to ascend from 4.7 percent in 2022 to 20.1 percent in 2023 and 40.5 percent in 2025. On the other hand, DDR4 DRAMs are expected to slide to 8.5 percent in 2025 after peaking at 49.5 percent in 2022.
Although Samsung Electronics refused to confirm the Taiwanese media outlet's report, some experts predicted that Samsung will not immediately stop rolling out DDR3 DRAMs. “In Taiwan, where the memory semiconductor market is not large, unreasonable claims have been made with regard to Korean chipmakers,” an industry watcher said. “I don’t think that Samsung Electronics will stop producing DDR3 DRAMs right away, as there is still demand for them.”