Domestic manufacturers broke out in an all-round way, the focus of observation of the global storage industry in the first half of the year

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In the cutting-edge technology industry that can go through a round of “life and death” in a few months, change is the main theme. Entering 2020, black swans are flying together, and the introduction of many new variables has brought more uncertainty to the storage industry.

Looking back on the first half of the storage industry, some events are worth recalling, and some changes point to the future. Global semiconductor Observation will guide you to sort out the key observations.

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1. Domestic storage “core” forces

The domestic replacement is expected to catalyze, and semiconductors have become the focus of technology-themed funds in the first half of the year, which can be described as full of limelight. As the high prosperity continues, leading companies in subdivided tracks have also ushered in an inflection point of rapid growth.

As the largest NOR chip supplier in China and the fourth largest in the world, Zhaoyi saw the semiconductor capital frenzy shortly after the beginning of the year. On February 13, Zhaoyi’s stock rose by more than 9%, and its stock price reached a record high. The total market value reached 102.073 billion yuan, becoming the sixth domestic semiconductor company with a market value of over 100 billion yuan.

However, some investors directly called “overheating” and reminded that the current static valuation may be too high, and the market soon sent a signal that “entry needs to be cautious”.

The breakthrough made by domestic storage manufacturing this year can also be felt by ordinary people. Consumers who can buy domestic solid-state drives (SSDs) and memory sticks begin to realize that the trend of “domestic storage replacement” is really tangible.

On April 13, Yangtze Memory, a subsidiary of Tsinghua Unigroup, announced the successful development of its 128-layer QLC 3D NAND flash memory. On September 10, Changjiang Storage announced the launch of two consumer-grade SSD products.

It is worth mentioning that YMTC has a number of patents, and almost all technologies are independently developed. YMTC’s unique Xtacking architecture can process peripheral circuits and memory cells on two separate wafers, enabling NAND to have higher I/O interface speed, higher storage density and smaller chip area.

In May, a number of memory sticks equipped with Changxin Storage’s 10-nanometer DDR4 chips were launched. The first China-based Guangweiyi PRO DDR4 memory stick was manufactured by Shenzhen Jiahe Jinwei. The DRAM chip independently developed by China has finally been put into the market, and the history of the memory chip industry has been written again.

Changxin Storage has not only developed DRAM chips with a 19-nanometer process, which fills the domestic gap, but also opened up the whole process from design to production.

After the international memory chip market welcomes Chinese players, it will see more Chinese faces in the future. Tsinghua Unigroup has returned to the DRAM arena, and domestic companies such as Zhaoyi Innovation have also entered the game.

2. International manufacturers are fighting to upgrade, and DRAM enters the EUV era

In the first quarter of 2020, with the recovery of DRAM prices, the confrontation between leading storage manufacturers has become more intense.

At present, Samsung Electronics, SK Hynix and Micron Technology account for more than 90% of the global DRAM market. Among them, Samsung and SK Hynix, the top two, will introduce EUV technology for extreme ultraviolet lithography equipment in DRAM production.

The first to enter the EUV era is naturally Samsung. On March 25, Samsung announced that it has successfully shipped 1 million units of the industry’s first 10nm-class DDR4 DRAM modules using EUV, and has completed global customer evaluations.

Samsung’s fourth-generation 10-nanometer (D1a) and more advanced 10-nanometer DRAMs will start using EUV, and mass production of D1a-based DDR5 DRAM and LPDDR5 DRAM is expected to begin in 2021.

Relevant insiders of SK hynix revealed that the company has begun to develop the fourth-generation 10-nanometer process (1a) DRAM, with the internal code name “Nanjing Star”, and it is expected that EUV technology will be introduced in the process.

There are too many variables in 2020. Industry insiders observe that memory manufacturers do not easily expand production capacity, but instead increase their supply capacity by optimizing process technology. While the process is speeding up, it is expected that the market competition for memory production based on EUV technology will become more intense.

EUV technology does have the effect of reducing costs, but the threshold is extremely high. Whether it is adopted is worth re-evaluating. Xu Guojin, vice president of Micron and chairman of Micron in Taiwan, said that Micron does not plan to follow up, and there is no EUV plan at present.

 3. DDR5 is slightly slower, LPDDR5 leads a new round of product competition

How have mainstream memory specifications progressed this year?

Compared with DDR5, which has a slower pace of mass production and application, low-power LPDDR, which is mainly used in mobile terminal markets such as smartphones, is progressing rapidly, and has already set off a wave in the field of terminal products.

In February this year, Micron announced the delivery of the world’s first LPDDR5 chip. Since then, Xiaomi Mi 10 has adopted LPDDR5 memory chips across the board, and the suppliers are Micron and Samsung.

As soon as the news that Xiaomi was equipped with LPDDR5 chips came out, Ni Fei, president of Nubia, immediately announced that the entire Red Devils 5G series comes standard with LPDDR5. Two days later, Realme Vice President Xu Qi announced that the realme X50 Pro comes standard with LPDDR5.

From the perspective of the adoption effect, according to the parameters provided by Micron, LPDDR5 saves 5% to 10% of power and extends battery life by 5% to 10% compared to LPDDR4.

SK Hynix plans to mass-produce DDR5 this year, Samsung plans to mass-produce DDR5 based on the D1a process in 2021, and Micron’s 1Znm process DDR5 registered DIMM (RDIMM) has begun to sample.

According to TrendForce, the application scenarios of DDR5 are mainly computer and server products, but it needs to match the specifications of mainstream CPUs. It is expected that a certain number of products will not be available in the market until the second half of 2021.

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1. Domestic substitution speed up, from 0 to 5%

The slogan of domestic substitution of semiconductors is loud, and the memory with a very low self-sufficiency rate undoubtedly has the strongest voice.

According to Chinese customs data, in 2019, my country imported US$304 billion worth of integrated circuits, more than one-third of which was memory. In 2018, the production volume of domestic storage was zero.

DRAM and NAND Flash are the most mainstream memory products. In the field of DRAM, three international manufacturers control the major global market shares. Benefiting from the launch of Changxin memory DRAM chips, China’s memory has begun to achieve partial replacement in the low-end field.

The new NAND Flash factory, Yangtze Memory, currently has a 12-inch wafer fab with a full production capacity of 100,000 wafers per month. YMTC plans to triple the monthly output of its new factory in Wuhan to 60,000 pieces by the end of the year.

The first half of 2020 witnessed many breakthroughs in domestic storage manufacturing. The Nikkei Asian Review reported that China’s global share of memory production will increase to 5% this year.

 2. The price has rarely risen, but the pressure is still there

The spot price of some memory particles in the spot channel has risen, causing the market to pay great attention to whether it will drive the memory industry to reverse upward. TrendForce said that the spot price of DRAM has been rising for a long time, but the price of DRAM is still under pressure in the second half of the year.

TrendForce also stated that, looking at the current DRAM market, consumer DRAM only accounts for about 8% of the overall DRAM market consumption. The key to the ups and downs is the inventory level of both the supply and demand sides, and when the purchasing momentum of mainstream server DRAM will recover.

Before data center and enterprise server companies restart a new round of replenishment, the DRAM price pressure is still there, and the rebound in spot prices may only be a temporary effect.

  3. Expand production or reduce expenses?Positive Forecast and Prudent Reality

In September 2018, the memory boom began to decline, bottomed out in the third quarter of last year, and began to pick up. After the storage market showed a recovery trend, the overall expectations of the semiconductor industry were raised. According to market forecasts, global semiconductor companies will begin to expand production in 2020, and the new production capacity of the semiconductor industry in 2021 is expected to hit a record high.

But the excitement is structural. In other words, after the arrival of black swans such as the new crown epidemic, it is inevitable to encounter practical considerations.

Analysts pointed out that the impact of COVID-19 is significant and is expected to continue to have an impact on the memory market for the foreseeable future. Given the uncertainties in the market, memory suppliers must respond carefully to ensure the long-term health of the memory industry.

Epilogue

Whether looking back or looking forward, domestic substitution is undoubtedly a high-profile clue. In addition to the introduction of EUV technology, the change of DDR generations, and the fierce upgrade of leading manufacturers, local manufacturers represented by Changjiang Storage, Changxin Storage, and Zhaoyi Innovation have also begun to make more noise due to breakthrough progress while dealing with local supply problems.

Farewell to the landmark first half of 2020 for domestic storage, domestic storage manufacturers also usher in a good opportunity for development.

Under the drastic changes in the international environment and the impact of the epidemic, what are the macro changes and market segments in the global storage industry? How should companies seize structural opportunities and achieve breakthroughs in the market?

 

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