Industry News

Record High Revenue and Price Increases Expected for the Memory Market

August 23, 2024
Industry News

Record High Revenue and Price Increases Expected for the Memory Market

August 23, 2024

The memory market is expected to reach record highs, with substantial revenue increases, longer lead times and shortages forecast for the near future.

According to a press release from TrendForce, there are multiple factors at play, including the increased demand for high-value memory items and limited supply.

What Memory Types are Seeing the Most Growth?

The memory market is currently led by two primary types: DRAM (Dynamic Random Access Memory) and NAND Flash memory. Both are expected to see significant revenue increases in the near future:

  • DRAM:
    • This type of memory has a projected revenue of $90.7 billion in 2024, a 75% year-on-year (YoY) increase, and will rise to $136.5 billion in 2025.
    • DRAM is widely used in computers and servers for temporary data storage that requires fast access. It is particularly important in applications where there is a need for speed, like high-performance computing, gaming, and AI learning models.
  • NAND Flash:
    • NAND Flash is expected to see some of the fastest growth of all memory types. Revenue is forecast to grow by 77% YoY in 2024, reaching $67.4 billion, with a further 29% YoY increase to $87 billion in 2025.
    • NAND Flash is used for long-term data storage in devices like solid-state drives (SSDs), smartphones, and other consumer electronics. It is valued for its ability to retain data without power, making it ideal for portable and wearable devices.

Reasons Behind the Revenue Increases

 

  1. Uptake in HBM: One of the driving factors for the increase in DRAM revenue may be High Bandwidth Memory (HBM) architectures. HBM is commonly used in high-performance computing, especially in applications requiring rapid data processing, such as AI and graphics rendering.
  2. Increased Bit Demand: As computing requirements grow, so does the demand for memory bits. More sophisticated applications, particularly in AI and high-performance computing, require vast amounts of memory.
  3. Advancements in Memory Technology: The rise of high-value products like DDR5 (Double Data Rate 5) and LPDDR5/5X (Low Power Double Data Rate 5), which offer improved performance and efficiency, is pushing average industry prices upward. For example, DDR5 is expected to account for 40% of server DRAM bit shipments in 2024, rising to 60-65% the following year.
  4. Increased Server Demand: Businesses are investing in cloud computing and AI, while consumers are increasing their use of streaming services. This increased server demand is boosting the need for both DRAM and NAND Flash.
  5. Automotive Industry Growth: The automotive sector is becoming a significant driver of memory demand, especially with the increasing use of advanced driver-assistance systems (ADAS) and other high-tech features in vehicles.
  6. Supply Constraints: According to TrendForce, the increase in memory production will result in increased raw material demand. Alongside this, the demand is likely to lead to shortages and increased prices for manufacturers and consumers.

Don’t Forget!

With the expected high demand, it is very possible that memory products will be in short supply in the near future, leading to price increases.

Are you in need of electronic components but worried about supply stability? Cyclops provides a scheduled ordering service, letting you buy your years’ supply and lock in prices while they are stable. We can deliver throughout the year in line with your schedule.

Contact Cyclops Electronics today to secure the components you need to stay ahead in this rapidly evolving industry.

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