Samsung, SK Hynix, Micron, and domestic manufacturers have successively issued EOL notices for the old process DDR4 with insufficient profits, planning to gradually stop DDR4 shipments in the next two to three quarters, and only maintain limited supply in specific industries such as automobiles and industries that require long-term locking materials. Each DRAM manufacturer needs higher profitability and ROI levels to support the capital expenditures required for the research and development of next-generation advanced DRAM technology, advanced equipment, and capacity expansion, and to occupy market share with leading technological advantages in AI driven industrial upgrading. Therefore, driven by technological iteration, expanding profits, and AI demand, DRAM manufacturers have unanimously focused on migrating to advanced nodes such as 1a/1bnm, while consumer and server DDR4 only stays in old processes such as 1y/1znm, and the supply side relies more on inventory to meet the long-term demand for DDR4. With the continuous expansion of HBM and DDR5 production capacity in advanced processes, the proportion of DDR4 bit output from some original factories in the third quarter decreased to single digit percentages, and the DRAM production capacity of the three major original factories' 1x/1ynm processes will significantly decrease. Due to sufficient supply of processor platforms supporting DDR4/LPDDR4X, there is a severe shortage of supply for DDR4/LPDDR4X. The mid to low end SoC platforms have not yet fully adapted to LP5X. Driven by the recovery of profits from general-purpose DRAM, it is not ruled out that some DRAM manufacturers may consider restoring a certain proportion of LPDDR4X production capacity, in order to prioritize meeting the LPDDR4X needs of some tier 1 mobile phone customers and ensure that the normal shipment of the entire machine is not affected. However, it is expected that the supply of LP4X to other consumer customers will still be very limited, and the supply of LPDDR4X for consumer 2/3/4GB is expected to continue to be scarce. The DRAM production line that has been switched by the original factory is irreversible and may maintain a small amount of DDR4 production capacity based on existing profits, but the current production and supply of DDR4 cannot meet the existing market demand.
Due to DDR5 chips starting from 16Gb capacity, DDR3 is not sufficient to support 8Gb capacity, resulting in a particularly tight supply of 8Gb DDR4 chips. This not only puts significant hardware upgrade pressure on consumer terminals, but also causes a shortage of DRAM chips used in eSSD new orders for DRAM base. The contract price is expected to continue to rise by 30% -40% in the third quarter. Mobile phones: It is expected that the global smartphone shipment volume will remain basically the same year-on-year by 2025, with about 1.2 billion units, ， The demand for LPDDR4X in mobile phones still accounts for a large proportion. After the switch of the original production line, it is expected that there will be an overall supply gap of about 15% to 20% for LPDDR4X in mobile phones, especially for low capacity LPDDR4X of 6GB and below, which is extremely limited and scarce. This has driven a month on month increase of over 20% in LPDDR4X contracts in the third quarter and is approaching the ASP of LPDDR5X. PC: Global PC shipments are expected to increase by approximately 2.8% year-on-year to 261 million units in 2025, with AI PC shipments expected to exceed 90 million units, making AI PC the main growth driver of the PC market. Due to the continuous reduction of storage capacity for PCs by the original factory, it is expected that the price of cSSD from the original factory will tentatively increase in the market situation where the original factory supply is limited and profits are maintained. Of course, this is highly anticipated by major PC customers and still requires a lot of bargaining. With the reduction of DRAM production capacity in the old process, the supply of consumer PC DDDR4 is extremely tight. The contract price of PC DDR4 is expected to increase significantly by 30% to 40%, and the price of PC DDR5 is expected to remain stable at a medium to low single digit percentage month on month growth. Server: Starting from 2024, the demand for DRAM bits in servers will surpass that of Mobile DRAM, making servers the largest application market for DRAM. In 2025, the demand for DRAM bits in servers and HBM will continue to maintain strong growth momentum. The proportion of server DRAM bit demand is expected to further expand to 36%, and the proportion of HBM bit demand is expected to reach 9%. HBM revenue is expected to account for more than 25% of the global DRAM market. Therefore, in order to comply with the trend of upgrading the demand for AI server DRAM, DRAM manufacturers are competing to make efforts in server DDR5 and HBM, significantly reducing unprofitable old DRAM processes such as 1x/1ynm, and actively expanding advanced DRAM processes such as 1a/1bnm. However, DDR4 and LPDDR4X are basically stuck in the old process. With the rebound in stocking demand, the market has exposed a certain supply gap, and spot prices have risen sharply compared to contract prices. To ensure the stability of the supply chain, the shortage of DDR4/LPDDR4X will accelerate the migration of terminal demand to DDR5/LPDDR5X. With the increasing shipment volume of HBM3e equipped on the new generation AI server Blackwell, HBM has a significant impact on the global DRAM supply and market landscape. In the first quarter of 2025, SK Hynix's DRAM sales surpassed Samsung for the first time in history, ranking first in the DRAM market.
In the first quarter, SK Hynix, Samsung, and Micron had DRAM market shares of 36.7%, 35.6%, and 22.9%, respectively. At the same time, DRAM technology is accelerating its migration towards 1b, 1 γ, and more advanced processes. DRAM manufacturers are actively promoting the transition of LPDDR4X to LPDDR5X and DDR4 to DDR5 products, and seizing the market advantage of 12Hi HBM3e and HBM4. The global DRAM market is firmly moving towards high-performance, high-capacity, and high profit development. In order to improve operating profits and fully meet the memory performance and capacity requirements of AI servers, DRAM manufacturers are aggressively shifting towards advanced DRAM processes, significantly reducing the production capacity of the unprofitable 1y/1znm DRAM old process, and actively promoting the research and mass production of the sixth generation 10nm process DRAM. The prices of spot DDR4 and DDR5 chips have all risen, with some DDR4 chip prices doubling in the second quarter. According to CFM flash memory market data, since the second quarter, DDR5 16Gb eTT/16Gb Major/24Gb Major has increased by 11%, 7%, and 24% respectively, while DDR4 4Gb/8Gb eTT/8Gb 3200/16Gb eTT/16Gb 3200 has increased by 27%, 60%, 137%, 60%, and 167% respectively.
Japanese company MGC recently notified carrier manufacturers that the delivery time for some BT materials (NS/NSF Low CTE Glass) with a thickness of only 0.04 or 0.06mm has reached 16 to 20 weeks, which is more than twice the normal period in the past. The shortage of key materials such as packaging substrates continues to ferment and propagate to the finished product end, making it even more difficult to produce LPDDR4X products that are already affected by the shortage of storage resources. Especially, the delivery pressure of 1/2/3/4GB low capacity LPDDR4X is more prominent, driving the price of LPDDR4X products to continue to rise. The prices of related integrated eMCP and uMCP products have increased in line with the rise in LPDDR4X prices.
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