Server DRAM is anticipated to account for about 37.6% of the overall bit production of the DRAM industry in 2023, according to a study conducted by TrendForce. On the other hand, mobile DRAM is anticipated to account for approximately 36.8% of the entire bit output. So, by the end of this year, server DRAM will have officially surpassed mobile DRAM in terms of the part of the entire supply they account for.
Since 2022, DRAM manufacturers have been modifying their product mixes in order to increase the amount of wafer input allocated to server DRAM goods while simultaneously decreasing the amount of wafer input allocated to mobile DRAM products. This pattern is being pushed forward by two different factors, stated TrendForce. To begin, there is a positive prognosis for demand in the server DRAM market category. Second, during the year 2022, the mobile DRAM market saw a substantial overstock of inventory.
The estimates for the rise of smartphone shipments and the increase in the average Memory content of smartphones continue to be relatively cautious even as we go forward into the year 2023. As a consequence of this, DRAM providers expect to continue increasing the proportion of server DRAM included within their product mixes.
Inventory Pressure
According to TrendForce, the year 2022 marked the beginning of a discernible slowdown in the rate of expansion of the average DRAM content of smartphones. The significant amount of inventory pressure that smartphone companies were going through at that time was a significant factor in the creation of this situation. While creating gadgets that were going to be released in the year 2022, most brands kept with the hardware specs that could be offered by the components that they already had in stock when making such decisions. Because of this method, the expansion of the DRAM content was restricted.
Currently, in the year 2023, the efforts that smartphone makers have been doing to decrease their stocks are progressively having a favorable outcome. In addition, Apple plans to increase both the capacity and the specs of the DRAM solutions that will be included in the subsequent version of the iPhone, which is slated for release later this year.
Taking these most recent considerations into account, TrendForce projects that the year-over-year increase rate of the average DRAM content of smartphones will reach around 6.7% by the year 2023. As compared to the year-over-year growth rate of 3.9% for 2022, this estimate represents a substantial leap forward in quality. On the other hand, TrendForce projects that the growth rate year over year will remain below 10% throughout the course of the next several years.
AI and HPC Applications
Turning to servers, the increase in the amount of Memory they contain has been driven by the emergence of new applications associated with artificial intelligence (AI) and high-performance computing (HPC). In the future, server shipments of complete devices and memory content per box will outpace those of smartphones. This shift is expected to take place. Hence, during the next several years, server DRAM will constitute the greatest percentage of the entire bit production from the DRAM business.
Moreover, TrendForce notes that server DRAM products exhibit some degree of price elasticity of demand, and that the contract pricing of these goods have been subject to considerable price decreases since the third quarter of 2012. Because of the aforementioned contributors, TrendForce anticipates that the typical amount of Memory that servers have installed will rise by 12.1% year over year by the year 2023.
Enterprise SSDs
Because of the impact of the COVID-19 pandemic, the market for cloud services has grown substantially, which has led to a significant rise in the number of servers shipped and the amount of RAM that is typically found in servers on average. In addition, as a consequence of this evolution, enterprise solid-state drives are becoming an ever-increasing share of the total demand for NAND Flash.
Going forward into the year 2023, with the advent of the post-pandemic period, the demand bits growth associated to client SSDs has slowed down because to the large decrease in notebook computer shipments. This is the case because of the arrival of the post-pandemic period. Yet, as a result of the precipitous drop in costs of NAND Flash, the demand from the smartphone and server sectors has increased significantly. Because of the influence of the price elasticity of demand, the increase of NAND Flash content per box will reach a YoY rate of more than 20% for both smartphones and business SSDs. This growth will be driven by the effect of price competition.
According to TrendForce, it is also important to note that during the next several years, the number of services that are driven by technology connected to AI will significantly increase. And since there is a growing need for high-speed data storage as well as high-performance computing, it is anticipated that the order volume for corporate SSDs will exceed that of other categories of NAND Flash devices. According to TrendForce’s most recent projections, enterprise solid-state drives (SSDs) would overtake other application segments of the NAND Flash market in terms of demand bits by the year 2025.
