"Super Cycle" "Super" "Cycle"

Since the arrival of “Big Data” in 2016, the storage semiconductor market has experienced explosive growth (Figure 1). In 2017, the buzzword "Super Cycle" was born. What is the explosive growth of storage semiconductors? -- In the second half of 2018, the storage semiconductor's foam burst and fell into a downturn.

The author believes that the reason for the sluggish storage semiconductor market is mainly because of the continued failure of the Intel 10nm process, resulting in insufficient processor supply for PCs and servers. However, storage semiconductors that depend on PCs and servers are flooding the market, eventually leading to a price collapse.

Figure 1: The shipments for each quarter of each semiconductor are shifted.

As a result, the so-called "Super Cycle" can be said to be the "super" "up & down" cycle of the semiconductor market. That is to say, as a part of the "Silicon Cycle" that has been well known, the storage semiconductor market has risen and fallen in recent years.

As a result, there will be a boom in one day, and sooner or later the recession will come. The author believes that the reason for the storage semiconductor market is Intel, and its person in charge has said that "so far, the shipment of our company's 10nm processor has been delayed, we will follow the plan announced in 2018 as scheduled in 2019 6 Delivery in the month".

Then, the storage semiconductor in Figure 1 is mainly DRAM and NAND flash memory (hereinafter referred to as "NAND"). The author made the map according to the data published by the Global Semiconductor Trade Statistics Organization (WSTS). From Figure 1, It can be seen that the trends of the two are very different. This paper explains the differences and analyzes the reasons. It will also look into the future storage semiconductor market.

The DRAM and NAND market trends are extremely different

Figure 2 shows us the quarterly shipments of DRAM and NAND. At the time of this table, I was mired when the market trends of the two storage semiconductors were very different.

Figure 2: The amount of shipments for each quarter of DRAM and NAND.

DRAM sales reached its peak in the third quarter of 1995, the third quarter of 2000, the fourth quarter of 2006, the third quarter of 2010, the fourth quarter of 2014, and the third quarter of 2018. Almost every 4-5 years, there is a peak period, and the entity is now "Silicon Cycle".

In addition, except for the third quarter of 2018, NAND has almost no higher peaks. From the second quarter of 2016 to the period of rapid growth, the market has expanded almost in a straight line. In other words, NAND does not have the "Silicon Cycle" phenomenon like DRAM.

Why are the market trends of DRAM and NAND so different?

DRAM "Silicon Cycle"

The "Silicon Cycle" of the DRAM will be described as follows. For example, with the release of Windows 95 in 1995, the "IT bubble" in 2000, and the "Big Data" in 2016-2017, the demand for servers has expanded dramatically. At this time, as the demand for DRAM exceeds the supply, the price of DRAM has risen all the way. The result is that the amount of DRAM shipments continues to increase, ushered in a boom period.

At this time, although the storage semiconductor manufacturers increase the production of DRAM, once the supply exceeds the demand, the price will fall. During the period from 2016 to 2017, although DRAM did not increase production in large quantities, due to insufficient supply of processors, there was a phenomenon of excess DRAM and price collapse.

That is to say, although the situation will be different, but if the supply exceeds the demand, it will cause the price to fall, and the storage semiconductor will also fall into depression. There is such a "Silicon Cycle" phenomenon in the DRAM market.

DRAM shipment amount and shipment quantity

Figure 3 is an annual change table of the amount of DRAM shipments and the number of shipments. From the perspective of the number of DRAM shipments, it is mainly divided into the following three major periods.

(1) 1991-2003: The period of slow growth in shipments.
(2) 2003-2010: The period of rapid increase in shipments.
(3) After 2010: The annual shipments have remained at almost 15 billion, almost stable.

Figure 3: Annual change table for DRAM shipments and shipments.

Probably in 2003, the growth rate of DRAM shipments is very different. Since the beginning of the 21st century, the economic rise of Asian countries led by China is the main reason. That is to say, in the Asian market such as China, people generally purchase PCs, mobile phones, digital home appliances, etc., so the market for DRAMs for the above products is also rapidly expanding. We can also analyze the same conclusion from the fact that the Asian semiconductor market has expanded dramatically since 2001 (Figure 4).

Figure 4: Table of shipments of semiconductors for each quarter of each region.

After 2000, the number of DRAM shipments remained almost 15 billion a year, which was due to the “intensive” of multiple DRAM vendors. Especially in 2012, Elpida closed down and was acquired by Micron Technology in the United States. Finally, DRAM manufacturers only have three companies, Samsung Electronics, SK Hynix, and Micron. As a result, the number of DRAM shipments remained largely consistent as the three companies conducted “tacit negotiations” and adjusted production.

NAND does not have the phenomenon of "Silicon Cycle"

Now let's return to Figure 2 to see the market trend of NAND. Before 2016, NAND does not have "Silicon Cycle" like "DRAM". Here, as with DRAM, the annual change table of the shipment amount and shipment quantity of NAND was produced, and the number of shipments of NAND almost increased linearly (Fig. 5). However, with 2016 entering the “Super Cycle”, its growth seems to be slowing down.

Figure 5: Annual shift in NAND shipments and shipments.

First, let us consider the reasons for the increasing shipments and shipments between 2000 and 2016. NAND is a non-volatile storage semiconductor that was invented in 1987 by Mr. Shigeo Kazuo, who was originally employed by Toshiba. However, in the 1990s, Toshiba's business reform, NAND was not applied.

However, by the year 2000, large-scale application markets such as digital cameras, Apple's music players "iPod", and mobile phones have emerged. Moreover, in 2007, the iPhone began to be released, opening the door to smartphones, and the HDD of both PCs and servers began to be replaced with SSDs, and the market scale was further expanded.

That is to say, while NAND continues to develop applications, the market size is also expanding, so its demand has been rising, so there is no price collapse like DRAM. In addition, even if the price falls, the demand will increase due to new applications, so the shipment amount and shipment volume will increase linearly.

NAND also appeared "Silicon Cycle"

After 2017, the growth in NAND shipments has begun to slow, which may be due to the shift of NAND from 2D to 3D. Due to the extremely difficult production technology of 3D NAND, the yield is difficult to improve, and 3D NAND is likely to fail to ship as planned.

At the same time, like DRAM, the amount of NAND shipments has also experienced a leap in growth since 2016. In the second half of 2018, the reason for the downturn was DRAM, which was due to insufficient supply of Intel processors. That is to say, as the supply of NAND exceeds its demand, the price plummets and the shipment amount drops sharply. As a result, NAND has seen the first "Silicon Cycle" in history.

Future market outlook for DRAM and NAND

Regarding DRAM, in fact, three storage semiconductor manufacturers dominate the market. In the future, they should also conduct "tacit negotiation" without increasing the number of DRAM shipments and slowly pushing forward the DRAM business. However, the "Accident" like this "Super Cycle" should reappear in the future. Therefore, it is expected that the "Silicon Cycle" will be repeated in the DRAM market in the future.

In addition, China has a tendency to join the DRAM market. The United States has included JHICC (Fujian Jinhua) in the Entity List (EL), and American companies such as Applied Materials, Lam Research, and KLA banned the export of US-made equipment, causing frustration in the development and production of DRAM.

In other words, the United States "defense" by setting "breaking the DRAM market produced in China" as "breakwater." However, there is no guarantee that this "breakwater" will have a permanent effect. China is promoting the localization of production equipment and materials. Once successful, Chinese-made DRAM is likely to sweep the whole world.

On the other hand, the NAND that experienced "Silicon Cycle" for the first time, like DRAM, became a storage semiconductor that fluctuated sharply in the market according to supply and demand. It can even be said to be a "storage semiconductor that grew up." Therefore, it is expected that the number of NAND shipments will increase significantly in the future, and the shipment amount will change periodically.

In short, DRAM, NAND related equipment, and material manufacturers all pay more attention to marketing in order to predict the "Silicon Cycle" in advance.