Next Year Marks the Dawn of the 'DDR5 Era'... Memory Hegemony Battle Intensifies

Samsung Electronics, Industry Leader, Plans DDR5 DRAM Launch in Late Next Year
Competition with SK Hynix and Micron Expected to Intensify
NAND Process Development Heats Up, Battle Focused on 176-Layer Technology

[Asia Economy Reporters Changhwan Lee and Gimin Lee] As the supercycle of the semiconductor market begins earlier than expected, the competition among semiconductor companies for technological dominance to secure market leadership is intensifying. In particular, the competition for new technologies in the memory semiconductor market, where Korean companies stand out globally with products like DRAM and NAND flash, is becoming fiercer.

Memory semiconductor companies such as Samsung Electronics, SK Hynix, and Micron are fueling competition by consecutively unveiling new products and next-generation process technologies to expand their market share.

◆ The Era of DDR5 DRAM Arrives, Fierce Competition to Secure Market Leadership

According to industry sources on the 21st, Samsung Electronics, the No. 1 player in the DRAM market, plans to officially launch DDR5 DRAM in the market around the second half of next year. DDR5 is a next-generation product that is significantly faster in transfer speed and capacity than the currently widely used DDR4 DRAM. The data transfer speed reaches up to 6400 Mbps (megabits), about twice as fast as DDR4's 3200 Mbps.

Power consumption is 1.1V (volts), about 9% less than DDR4's 1.2V, while the maximum capacity is 64 Gb (gigabits), four times that of DDR4's 16 Gb. DDR5 is expected to help improve profitability as its unit price is higher than DDR4. For reference, DDR4's selling price was 1.5 times higher than its predecessor DDR3, and DDR5 is likely to be priced at a similar level.

With the semiconductor industry anticipating a long-term price increase supercycle, there is also a possibility that Samsung Electronics will release DDR5 earlier than market expectations. Since securing market leadership is crucial in semiconductors, there is speculation that the timeline may be advanced to maintain a super-gap. An industry insider said, "The DRAM market is improving faster, so Samsung Electronics may expedite the launch and mass production of DDR5."

Pressure also comes from competitors who have already launched DDR5 in the market. SK Hynix released DDR5 globally for the first time on October 6. SK Hynix developed the 16 Gb DDR5 DRAM for the first time worldwide at the end of 2018, and after compatibility verification with customers such as Intel and applying global standard specifications, it has now brought the product to market. SK Hynix plans to focus on the next-generation semiconductor market and the growing eco-friendly high-performance memory market with this product, aiming to strengthen its position in the server DRAM sector.

As DDR5 launches become more active, the related market is expected to grow rapidly. Market research firm TrendForce forecasts that DDR5's market share in the DRAM market will significantly increase starting next year. For PC DRAM, the share is less than 1% this year, but it is expected to rise to up to 10% next year. Server DRAM is projected to increase from 4% this year to 15% next year.

◆ Fierce Next-Generation Process Competition in NAND Flash

The competition in NAND, another pillar of memory semiconductors, is as intense as that in DRAM. NAND is currently experiencing fierce competition in next-generation process technology and mergers and acquisitions (M&A).

U.S.-based Micron announced last month that it has started mass production of the world's first 176-layer NAND flash memory. Micron explained that the new 176-layer NAND product has improved data read and write performance by more than 35% and is about 30% smaller in size compared to competing products of the same class.

NAND increases storage capacity by stacking cells vertically, so next-generation NAND involves higher layering. Companies are competing to increase the stacking level of NAND, which is currently at about 128 layers.

SK Hynix also announced on the 7th that it developed 176-layer 4D NAND earlier this month, following Micron. SK Hynix emphasized that this 176-layer NAND, the third-generation 4D product, improved productivity by more than 35% compared to the previous 128-layer product, enhancing cost competitiveness.

Samsung Electronics, the industry leader, plans to launch its 7th-generation V-NAND product next year. The 7th-generation V-NAND theoretically supports up to 256-layer stacking. Jinman Han, Executive Vice President of Samsung Electronics Memory Business Division Marketing Team, recently stated at a forum, "We plan to apply double-stack technology to next-generation V-NAND. Currently, the 6th-generation V-NAND uses 'single-stack' technology to stack 128 layers, but with double-stack technology, it is possible to stack up to 256 layers by simple calculation."

M&A competition is also intense. In particular, SK Hynix is focusing on expanding the NAND market as a new growth engine following DRAM. To this end, it acquired Intel's NAND business for 10.3 trillion KRW in October, the largest M&A amount in Korean history. With the acquisition of Intel's NAND business, SK Hynix has raised its global NAND market share to around 23%, the second position.

According to market research firm Omdia, as of the second quarter of this year, Samsung Electronics held a 33.8% share of the global NAND market, ranking first; Kioxia (formerly Toshiba) was second with 17.3%; Western Digital third with 15%; Intel fourth with 11.5%; and SK Hynix fifth with 11.4%.

The NAND market is expected to grow faster than DRAM. EVP Han explained, "NAND demand is expected to show an average annual growth rate of about 30-35% until 2024 due to the transition to 5G smartphones and server SSD (solid-state drive) demand, while DRAM is expected to show an average annual growth rate of 15-20%, centered on mobile and servers."

This content was produced with the assistance of AI translation services.