An unforeseen spike in DRAM and NAND flash ASPs has forced IC Insights to revise its previously slow IC market outlook by over 2x.
IC Insights has raised its worldwide IC market growth forecast for 2017 to 11%, from its original 5% outlook. The move was necessitated by data shown in it's March update to the firm's 2017 edition of The McClean Report.
The research company said the revision was necessary due to a substantial upgrade to the 2017 growth rates forecast for the DRAM and NAND flash memory markets. IC Insights now expects DRAM sales to grow 39% and NAND flash sales to increase 25% this year. The DRAM market growth is expected to be driven almost entirely by a 37% increase in the DRAM average selling price (ASP), as compared to 2016, when the DRAM ASP dropped by 12%. NAND flash ASPs are forecast to rebound and jump by 22% this year after falling by 1% last year.
In a press statement, IC Insights said that the DRAM market started 2017 the way it ended 2016—with strong gains in DRAM ASP. In April 2016, the DRAM ASP was $2.41 but increased to $3.60 in January 2017, a 49% jump. The firm said this was due to increasing demand from PC suppliers during the second half of 2016. A strengthening of ASPs is also evident in the mobile DRAM market segment.
At $57.3 billion, the DRAM market is forecast to be by far the largest IC product category in 2017, exceeding the expected MPU market for standard PCs and servers ($47.1 billion) by $10.2 billion this year.
Catching a moving market
IC Insights has added a caveat to the new prediction: With total DRAM bit volume demand expected to increase by 30% this year and DRAM bit volume production capacity forecast to increase by 20%, the quarterly DRAM ASPs could still surprise on the upside in 2017. The firm said DRAM output is also being temporarily slowed by the ongoing transition of DRAM production to <e;20nm nodes.
Figure 1: The DRAM market has been both a significant tailwind (positive influence) and headwind (negative influence) on the worldwide IC market growth in 3 out of the past 4 years.
IC Insights said that the DRAM market shaved two percentage points off of total IC industry growth last year. In contrast, the DRAM segment is forecast to have a positive impact of four percentage points on total IC market growth this year. On excluding the DRAM and NAND flash markets, the IC market growth rate forecast for 2017, when would be only 4%, or a third of the current worldwide IC market growth rate forecast that includes memory devices.
IC Insights had said in December 2016 that semiconductor suppliers Intel, Samsung, Qualcomm, Broadcom and SK Hynix will account for 41% of the semiconductor market (not including foundries) share in 2016. It appears that the development above will affect the fortunes of some of those top players. We will let you know when market researchers update their top 10 semiconductor company lists.