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Electronic Components Future Technology

The future of memory

Memory is an essential electronic component. Not only can it store data, but it can also process vast amounts of code. As it is so vital, manufacturers are upgrading it and adding improvements constantly. This could improve the way our computers and gadgets run but could also help people’s memories in the future.

Next-gen memory announcements

This year Samsung announced new products during the Flash Memory Summit in August. One of the products announced was the new ‘Petabyte Storage’, able to store as much data on a single server. A petabyte of storage (equivalent to 1,024 terabytes) would let manufacturers increase their storage capacity without requiring more space.

The company also announce Memory-Semantic SSD, combining flash and DRAM to to supposedly improve performance twenty-fold. This technology may be perfect going forward, suiting the increasing number of AI and ML operations with faster processing of smaller data sets.

SSD demand is increasing and other companies are vying for a share of the market. Western Digital also announced a new 26TB hard drive 15TB server SSDs earlier this year. Its new SSDs have shingled magnetic recording (SMR), which allows for higher storage densities on the same number of platters.

Market Worth

In 2021 the next-gen memory market was valued at $4.37 billion, and is expected to reach $25.38 billion by 2030. This demand is partly driven by high bandwidth requirements, low power consumption and highly scalable memory devices.

The need for scalable memory comes from the continually rising use of AI and ML. Lower-spec memory devices are causing bottlenecks in the functioning of these devices. Data centres are needed to process more data than ever before, so scalability is key for this market.

Futuristic Products

One promising product for the future of memory technology is Vanadium Dioxide. VO₂ is usually an insulator, but when it is heated to 68⁰C its structure changes and acts like a metal.

When an electrical current is applied to the circuit the metal would heat to its transition point. When it is cooled it would transition back.

Upon further study it was discovered that, when heated multiple times, the material appeared to remember the previous transitions and could change state faster. In a way, the VO₂ had a memory of what had happened previously.

The exciting discovery could mean the future of memory is brighter than ever. VO₂ could be used in combination with silicon in computer memory and processing. Especially for fast operation and downscaling, this material is an interesting prospect.

Our memories

Today our regular blog post coincides with world Alzheimer’s day. Dementia is a collection of symptoms caused by different diseases, that can result in memory loss, confusion, and changes in behaviour. If you would like to learn more about dementia or Alzheimer’s, visit Dementia (who.int)

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Memory suppliers to benefit from strong demand and supplier shortages

While the downsides to electronic components shortages are well known, business is booming for smaller memory suppliers.

Sales of Samsung DRAM grew 26% in Q2 2021 without meaningful production capacity growth, and as supply-demand imbalances grow, memory suppliers like Samsung, Micron, and others are turning to smaller suppliers to fill gaps.

As chip shortages continue, demand grows. Order books get filled off the page, creating longer lead times (up to 40-weeks) and extending standing orders. This is bad news for the end-product manufacturer but great news for suppliers, who see sales rise and bids increase to fuel record turnover and, in some cases, net profits.

The sector as a whole is booming, but no better example of taking the bull by the horns exists than Alliance Memory.  

Alliance Memory is a US-based 30-year old DRAM manufacturer, billed as a legacy SRAM supplier and a leading domestic supplier of DRAM and flash memory. The company’s run rate in 2021 is double what it was in 2020.

In an interview with EPS News, Alliance Memory CEO David Bagby explains why: “we went out to customers struggling to get Samsung. Now we have maybe the best representation of DRAM and SRAM product of anybody out there.”

Memory upturn forecast to continue

IC Insights, the foremost authority on memory and chip demand, has predicted a new record high for memory demand in 2022.

Stronger DRAM pricing is expected to lift total memory revenue 23% in 2021 to $155.2 billion. The memory upturn is forecast to continue into 2022 to $180.4 billion, surpassing the all-time high of $163.3 billion set in 2018.

Demand for memory, including DRAM, SRAM and flash, is being driven by economic recovery and the transition to a digital economy. Unlike other technological cycles, the current cycle of digitalisation weights it, fuelled by innovations in data centres, 5G and space networks, AI, robotics and IoT.

Sequentially, the average price of DRAM rose 8% in the first quarter of 2021. Another increase of 18-23% in Q2 sent memory suppliers into a spin. Demand is outstripping supply, creating a perfect storm for continued price increases.

Price increases expected to continue until late 2022

The price of memory is more sensitive to other electronic components because supply is controlled by a few big players. Smaller memory suppliers fill in gaps in supply, but the big guns like Samsung and Micron rule the roost.

When demand outstrips supply at the big guns, prices explode. We’ve seen it several times before, such as the memory price increase of 2018. Prices fell again in 2019, recovered a little in 2020, then soared again this year.

Memory is a commodity and companies are willing to pay big to get a hold of it. Bidding wars are not uncommon and 40-week lead times are normal today.

However, while the memory upturn is predicted to continue into 2022, Gartner says memory prices will dive at the end of the year, predicting that an “oversupply” of memory chips will develop as demand eases and supply increases.

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Electronic Components

What does 2021 hold for the electronic components industry?

The coronavirus pandemic hit the electronic components industry like a freight train, knocking supply and demand for six. Now that 2021 is upon us, economies are starting to open up with pinned hopes on vaccines. This could be a banana skin, but 2021 should be a calmer year overall. The world should get back to business.

2021 in a nutshell

The avenues shut down for raw materials and shipments of electronic components will begin to open back up in 2021. This will create a healthier supply and demand market than 2020. Some issues will remain. Component shortages are likely, and this is especially true of newer parts that are found in connected devices.

Semiconductors will lead demand

The semiconductor industry saw a significant increase in global chip demand in 2020 and this will only continue in 2021. Cyclicity driven by 5G and Wi-Fi 6 upgrades and tailwinds like edge computing, AI and AR / VR will fuel demand.

Who will benefit most? Our money is on Broadcom, Arm, Qualcomm, Intel, AMD, Nvidia and Skyworks with TSMC winning on the foundry side.

DRAM will follow the path of semis

Dynamic random access memory (DRAM) is as essential to connected technologies as semiconductors. 2020 saw a sharp increase in recovery from the first quarter, and 2021 will exhibit a similarly healthy supply and demand situation.

Who will benefit most? Samsung, Micron and SK Hynix, who are the first, second and third largest manufacturers of DRAM respectively.

Shutdowns will continue

The risk of shutdowns of component production because of the coronavirus will remain in 2021. This will create extended lead times and supply issues. Governments may be forced to shutdown factories in localised areas.

The good news is this will become less common as the year goes on. The pandemic’s impact on production will reduce over time.

Tailwinds will fuel more demand than cyclicity

When evaluating electronic component demand, cyclicity and tailwinds are often pitched against each other. In 2021, we expect tailwinds like AI, edge computing, robotics and VR / AR to fuel greater growth than cyclical upgrades.

This is a sign of the times. The world is getting more connected and smarter. Innovation will fuel tailwinds and create booming tech sectors.

Counterfeiters will grow more prolific

One of the sad realities of electronic components is counterfeit components. They are becoming more sophisticated. As manufacturers clamber to get stock in this year, they are at a high risk of being targeted by counterfeiters.

Companies should rigorously control purchase sources, conduct quality inspections and use a trusted distribution partner to combat these risks.

Looking to the future

In 2020, the electronic components industry handled the coronavirus pandemic in an efficient and calculated manner. Supply and demand issues hit the industry, but they were solved for the most part in good time.

2021 will be calmer for several reasons: 1) We now have a lived experience of the coronavirus and know how to manage shutdowns efficiently, and 2) There is an increased need for us to get back to work and get on with our lives.

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