The global memory market is set for an explosive period of growth, with revenues expected to reach record highs by 2025, driven primarily by the soaring demand for high-performance memory solutions in the burgeoning artificial intelligence (AI) sector. Leading market analyst TrendForce forecasts DRAM revenues surging by 75% in 2024 and a further 51% in 2025, while NAND flash revenues are also predicted to skyrocket by 77% and 29% in the same years.
This unprecedented growth is largely attributed to the increasing prevalence of AI-powered applications, which require vast amounts of high-bandwidth memory (HBM) to handle the complex computations involved. TrendForce identifies the rise of HBM, alongside the generational evolution of DRAM products, restrained supply due to cautious capital expenditure by manufacturers, and a resurgence in server demand, as the primary catalysts for this revenue surge.
The impact of this AI-driven demand is already evident in the financial results of memory chip manufacturers. Micron, for instance, reported an 81.5% year-on-year increase in revenues for its latest quarter, with President and CEO Sanjay Mehrotra stating, “Robust AI demand and strong execution enabled Micron to drive 17% sequential revenue growth, exceeding our guidance range in fiscal Q3. We are gaining share in high-margin products like High Bandwidth Memory (HBM), and our datacenter SSD revenue hit a record high.”
The company anticipates further price increases throughout 2024 as AI continues to fuel demand, with a potential “substantial revenue record” in fiscal 2025. This optimistic outlook reflects Micron’s confidence in the long-term growth of the AI market and its ability to capitalise on it.
The race for HBM dominance is also heating up, with Samsung Electronics forming a new HBM Development Team to focus on accelerating the development of its HBM3, HBM3e, and next-generation HBM4 technologies. This strategic move highlights the growing importance of HBM in the memory market and Samsung’s determination to remain at the forefront of this technological advancement.
However, while this growth trajectory paints a rosy picture for the memory industry, it also presents challenges. The increased demand for memory chips is expected to put upward pressure on prices, potentially squeezing profit margins for electronics manufacturers and ultimately impacting consumer prices. Moreover, the heightened competition in the HBM sector could lead to a race to the bottom in terms of pricing, potentially eroding profitability for manufacturers. As the industry navigates this exciting yet uncertain landscape, the next few years will be crucial in determining its long-term trajectory.
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