TAIPEI – The 2018 global DRAM supply is expected to show an annual bit growth of 19.6%, says DRAMeXchange, a division of TrendForce.

The top three major global DRAM suppliers – Samsung, SK Hynix and Micron – are in the midst of their capacity planning for 2018. All three tend to be conservative with regard to next year’s capital outlays, says the research firm. They have opted to slow down their capacity expansions and technology migrations, so they can keep next year’s prices at the same high level
as this year’s second half.

DRAMeXchange also forecasts the annual global DRAM bit demand for 2018 will grow by a larger margin of 20.6%. Hence, the general trend of undersupply will persist.

“Increase in memory content for smartphones and robust end demand from the server and data center markets will push the overall DRAM demand up in 2018,” says Avril Wu, research director of DRAMeXchange.

Wu said while new fabs are being planned to bring relief to the strained supply situation, they will not be ready for mass production until 2019 at the earliest.

“Constructing a 12" wafer fab will take at least a year,” said Wu. “And additional time has to be set aside for equipment installation and trial production runs.”

Furthermore, the plans from the top three suppliers indicate their respective wafer start volumes will expand 5% to 7% annually next year, mainly from the reallocation of existing capacities and upgrading of manufacturing processes.
Samsung’s and SK Hynix’s new plants will be in operation in 2019 at the earliest; Micron has yet to reveal its capacity expansion plan, says the firm.

Samsung’s monthly wafer start volumes are hitting 390,000 pieces on average. For Samsung, the only fab sites that currently have the extra space for more capacity expansion are Line 17 and a part of the Line 15 plant site. Samsung thus plans to build a second 12" wafer fab for making DRAM products in Pyeongtaek, South Korea.

SK Hynix is also facing the problem of having insufficient capacity to fulfill its DRAM orders. In terms of capacity planning, SK Hynix has reassigned a part of its M10 fab’s capacity to foundry works, instead of making DRAM products. Due to its old age, M10 will incur higher wafer loss if SK Hynix tries to upgrade its DRAM production to the 18nm process. Fulfilling foundry orders makes more economic sense for this outdated facility, says DRAMeXchange.

SK Hynix’s M14 fab is expected to achieve a monthly wafer start volume of 80,000 pieces by the end of 2017. Still, the supplier has resolved to build a new 12" wafer fab in Wuxi, China. The fab, which will be the second plant owned by SK Hynix in Wuxi, is expected to become operational in 2019 at the earliest.

A survey of Micron’s DRAM production capacity shows both its plant in Hiroshima, Japan, and the plant owned by its Taiwanese subsidiary Micron Technology Taiwan are running at full capacity. Only Micron’s other Taiwanese subsidiary, Micron Memory Taiwan, still has 60% to 70% of its A2 fab site available for capacity expansion. The extra space from A2 can be converted into an additional monthly wafer start volume of around 30,000 to 40,000 pieces. However, Micron has yet to reveal a plan for a new fab building. In the future, Micron may have to devise a growth strategy that takes account of its limited ability to increase its production capacity.

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