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1. DRAM prices have fallen month-on-month for six consecutive months, hitting the lowest level since December 2023, mainly due to the decline in global demand for computers and smartphones and the purchase of domestic products driven by China's subsidy policies.

2.AI demand has become the lifesaver of the DRAM industry, and the global DRAM market size is expected to reach $97.3 billion in 2023, a year-on-year increase of 85%.

3.3D DRAM technology is expected to become the next generation of memory technology, and the current DRAM chip process has reached the 10nm level, facing the challenge of shrinking process nodes.

4. Due to the increase in demand for AI, investors predict that DRAM prices are expected to usher in a wave of increases in the second half of this year.

5. The year-on-year growth of domestic players such as Longsys and BIWIN Storage is expected to enhance its competitiveness in the global DRAM market.

The above content is generated by Tencent's hybrid model and is for reference only

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Recently, the price of dynamic random access access memory (DRAM) has continued to decline, but it has attracted a lot of attention from investors.

To put it simply, DRAM, as a member of the memory family, uses capacitors to store data by storing how much charge it has, and is often used in large capacity main memory, such as computers, smartphones, server memory, etc.

Classification of memory (source: Leopard Research Institute).

You know, from last month's situation, 8GB DDR4 is $1.70 per sheet, and the smaller 4GB product is $1.30, both of which are down 3% from January. Moreover, this is already the sixth consecutive month of month-on-month decline in DRAM prices, hitting the lowest level since December 2023.

There

are two reasons for the decline in DRAM prices, one is the decline in global demand for computers and smartphones, which directly affects the price of DRAM. Second, China's subsidy policy has driven the trend of buying domestic products to strengthen, which has accelerated the decline.

However, the so-called investment is to invest in expectations. In the future, can the price of the product be like a bamboo, all the way to Changhong? Which segments of DRAM can stand at the top of the pyramid? The author will take you to find out today.

1. AI becomes a savior

At the end of last year, Micron, one of the players in the DRAM industry, said that it had received direct funding from the United States of 6.165 billion US dollars (about 45 billion yuan), which was planned to be used to strengthen the supply capacity of cutting-edge DRAM, which can be said to have caused a sensation in the entire chip circle.

Just last year, global DRAM and NAND flash sales revenue hit an all-time high of $167 billion, an increase of more than 85% from the previous year. Among them, the DRAM market size reached 97.3 billion US dollars.

Global Storage Market Size Forecast (Source: Titanium Media).

So why is DRAM so important? As far as I know, storage technology has increasingly become the backbone of AI (artificial intelligence) infrastructure.

The popularization of AI and the doubling of model parameters and computing power requirements have also brought greater demand to the storage field. For example, in order to increase the bandwidth and better exert the computing power, the mainstream AI training chips mainly use HBM (high-bandwidth memory) and computing power chips to package. HBM accounts for nearly 30% of the DRAM storage industry.

Micron has calculated that the DRAM requirements of each AI server are more than 8 times that of ordinary servers.

Second, 3D DRAM is expected to stand on the spire

In fact, if we stretch the timeline, you will find that starting from 2022, due to the decline in shipments of mobile phones, laptops, etc., memory chips will enter a downward cycle. By 2023, the global memory market size will decline by nearly 40%, which shows the rapid decline of the industry.

It wasn't until last year that players began to get better thanks to factors such as AI-driven demand growth and the effect of original factory production reductions.

Although 10nm is not the final limit of DRAM, as DRAM process nodes continue to shrink, challenges in process integrity, cost, capacitor leakage and interference are becoming more and more obvious.

As a result, 3D DRAM is a new type of DRAM technology with a novel memory cell structure that greatly increases the storage capacity per unit area and improves efficiency, so it is expected to dominate the next generation of technology.

So, since last year, many players have announced their 3D DRAM development roadmaps, such as Samsung's plan to launch an early version of 3D DRAM based on its vertical channel transistor technology in 2025. How will industrialization be in the future needs to be paid attention to.

Third, there is an expectation of price increases, and players are rising steadily

Looking ahead, many investors believe that DRAM prices may usher in a wave of increases in the second half of this year. NAND next door has been the first to usher in a recovery. Industry player SanDisk has issued a price increase letter to customers, announcing that starting next month, the price of its products will increase across the board, with an overall increase of more than 10%. Coincidentally, NAND manufacturers such as Micron, Samsung, and SK hynix also plan to raise prices in April.

As DRAM and NAND are two brothers, there is a certain correlation between the price trends. NAND has already taken the lead in entering spring, and it is estimated that the spring of DRAM is not far away. The important reason behind this is the increase in the demand for AI that we talked about earlier.

Judging from the performance of players, Longsys (301308), which takes DDR4 and DDR5 as its mainstream products, is expected to have an operating income of more than 16.5 billion yuan last year, an increase of more than 63% year-on-year, and a year-on-year turnaround in net profit. BIWIN Storage (688525) also saw a year-on-year increase of more than 85% in operating income.

Changes in Longsys stock price

In addition, some domestic players are also rapidly expanding DRAM production capacity, Changxin Storage announced at the end of last year that it had achieved mass production of DDR5 memory chips, marking a significant improvement in China's competitiveness in the global DRAM market. You must know that the company's DRAM market share is expected to increase to 10% this year, which means that it has the qualifications to wrestle with industry big players such as Samsung Electronics and SK hynix.

Therefore, the continuous rise of domestic players has made the theme of independent substitution one of the hottest topics in the capital market.

Note: This article does not constitute any investment advice. The stock market is risky, and you need to be cautious when entering the market. There is no harm in buying and selling.

Personal opinion, for reference only