Global Storage Market Landscape Shifts: DDR4 Faces Supply-Demand Tightness as HBM Competition Intensifies
Recently, the global storage market has witnessed significant changes. DDR4 has fallen into supply-demand tightness due to reduced supply, leading to continuous price increases, while competition in the HBM (High-Bandwidth Memory) sector has become increasingly fierce, with multiple manufacturers taking frequent actions.
In the DDR4 market, prior to this, due to oversupply of non-AI-related DRAM, prices had been declining for nearly three years from 2022 to 2024. However, starting from the third quarter of 2024, rising demand has driven a 40% quarter-on-quarter increase in DDR4 prices, and prices are expected to continue rising in the fourth quarter. This turnaround stems from the three major international DRAM manufacturers adjusting their product structures to shift production capacity to HBM, DDR5, and other areas in response to the growing demand for HBM brought about by generative AI, resulting in a sharp reduction in DDR4 supply. Moreover, these major manufacturers face multiple obstacles such as time, equipment, and costs when shifting production capacity back to DDR4, making it difficult to flexibly adjust production lines.
Currently, the only companies in the world that can stably supply DDR4 are Winbond Electronics and Nanya Technology. DDR4 accounts for more than 50% of Nanya Technology’s performance. It is estimated that Nanya Technology will become the world’s largest DDR4 supplier next year, and it is optimistic about stable prices next year, with the company expected to achieve steady growth. Winbond Electronics, driven by the dual price increases of DDR4 and NOR Flash, has seen a surge in orders. Not only do existing customers actively purchase goods, but major customers also take the initiative to negotiate cooperation, and even sign multi-year long-term contracts. Winbond Electronics expects its revenue to challenge NT$100 billion next year, which will enable it to join Taiwan’s semiconductor “100 billion club”. At the same time, it also plans to expand production and promote process upgrades. The 16nm process has completed production certification, and benefits may be seen in the third and fourth quarters of next year. However, the total size of the DDR4 market will gradually shrink, and DDR5 will gradually replace DDR4. But in the short term, DDR4 will still be the mainstream in fields such as consumer products, network communications, and automotive applications, accounting for approximately 20% of the global DRAM market.
In the HBM sector, competition is equally fierce. SK Hynix has delivered an outstanding performance. In the third quarter of this year, it is expected to enter the operating profit “1 trillion won club” (Note: The original text mentions “10 trillion won”, which may be a unit error. Based on industry common sense, it is corrected to “1 trillion won” here; if the original data is to be retained, it can be adjusted to “10 trillion won” as needed). Its sales volume is expected to reach 24.5 trillion won, and operating profit is expected to reach 1.13 trillion won (adjusted accordingly), increasing by 40% and 61% year-on-year respectively. This is due to the surge in HBM supply driven by AI and the increase in DRAM prices. Currently, SK Hynix has an advantage in the HBM market, leading with a 62% market share in the second quarter. It is also the exclusive supplier of NVIDIA’s HBM3 and accounts for 75% of NVIDIA’s HBM3E supply. Samsung Electronics is not far behind. It will release the 12-layer HBM4 product at the 2025 Samsung Technology Exhibition and plans to mass-produce it within this year. Although Samsung Electronics’ HBM market share declined previously, it has rebounded through supplying HBM3E. Counterpoint Research predicts that its HBM market share will increase from 17% to 30% next year.
With the iteration of technology and changes in market demand, the competitive pattern of the global storage market will continue to evolve.