2017 is an impressive year for the semiconductor industry due to the fact that the three end markets: PC, smartphones and data centers outperform 2016.
At the same time, we have noticed that in 2017, the driving force for rapid development of the semiconductor market around the world is also on the rise. Artificial Intelligence and the Internet of Things are becoming the driving forces behind the growth of the market.
Specifically, markets such as autopilot and industrial internet of things are on the rise, with unparalleled demand for storage solutions, while artificial intelligence places high demands on high-performance processors.
In 2017, the storage market is growing faster than the entire semiconductor market. In the past year, the storage market increased by 80.5%, while the semiconductor market grew by only 35%. At the same time, memory prices have risen dramatically in 2017 due to demand for DRAM out of supply by mobile and server equipment.
In 2017, Samsung, SK Hynix and Micron are the three largest players in the DRAM market. According to statistics from DRAMeXchange, the overall revenue of the DRAM market in 2017 increased by 16.2%, reaching a record high of US $ 19.2 billion in the third quarter of 2017.
Among them, Samsung’s DRAM business revenue increased 15.2%, reaching 8.8 billion step. DRAM business revenue of SK hynix increased by 22.5, reaching 5.5 billion U.S. dollars. Micron’s revenue increased 21% to 4 billion U.S. dollars.
Analysts ICInsights said Samsung, SK hynix and Micron, the top three companies in the DRAM market, accounting for more than 95% market share, but also makes these companies in the 2017 semiconductor company revenue rankings in the top five.
Mika Kitagawa, principal analyst at Gartner, predicts that DRAM out-of-stock will continue until the end of 2018, meaning that Samsung will become a semiconductor company with revenue over Intel’s revenue in 2017 and 2018, respectively.
DRAMeXchange data show that NAND market revenue increased by 14.3% in the third quarter of 2017 reached a record 15 billion US dollars.
Although the price of NAND is stable, the demand of NAND and SSD has been strong due to seasonal factors, setting a record high.
In the third quarter, Samsung, Toshiba and SK hynos increased by 19.5%, 18.1% and 15.4% respectively.
Walter Coon, director of NAND market research at IHS, said the NAND market will see weak and seasonal demand from the end of 2017 to early 2018, but the demand in the 3D NAND market is still strong.
As the market gradually realizes a balance between supply and demand, the rise in memory prices will not be the norm, especially as vendors continue to increase capacity.
Because suppliers want to earn long-term profits, they must comply with market rules.
As the IoT market continues to evolve, memory needs will also grow. Expected, the memory price will be moderate correction in 2018, but not a substantial decline.
Micron and Samsung in 2018 will continue to see high DRAM prices?
The biggest difference between DRAM and NAND is that DRAM is inelastic in demand, which means that demand is not affected by price changes, and it is difficult to limit its demand even now that DRAM prices are high.
The advantage is that PCs and mobile devices must use a certain amount of DRAM to achieve the expected performance, making DRAM a necessity in electronic devices.
Therefore, the shortage of DRAM products in PC and the increase of DRAM usage in mobile devices are also one of the reasons that DRAM continues to rise since June 2016. In turn, Samsung, SK Hynix and Micron are among the top five companies in revenue.
As more and more graphics-intensive applications in smartphones emerge and more and more adopt new technologies such as machine learning in data centers, there is a growing demand for memory. In particular, the graphics cards used by AMD and the memory used in some smartphones have caught up with mid-range computers, all of which indicate that the demand for DRAM will not decline in 2018.
DRAMeXchange predicts that by 2018, global DRAM supply will increase by 19.6%
The stock situation will be accompanied by phase.
The reason for this is that DRAM suppliers have always followed the rule that most of the money should be invested in technology rather than for capacity expansion.
Although these companies are now building a new DRAM manufacturing plant, but from the current progress point of view, by 2019 on the line is unlikely, so all three companies in 2018 will maintain a high revenue.
In particular, Samsung is currently focusing primarily on high-value products such as 10nm DRAM and DDR4X.
2018 NAND market will happen?
We mentioned before, DRAM market demand is inelastic, but the demand for NAND is flexible. So naturally, as NAND prices rise, market demand will decrease.
What’s more, the shortage of NAND market in 2017 is mainly due to the transfer of technology.
Another reason is that with the exception of Samsung and SK Hynix, NAND players are more involved and more competitive, and Intel, Western Digital and Toshiba are both involved in this market. Therefore also makes this market competition more fiercely than the DRAM market.
According to data from DRAMeXchange, last year, Samsung, SK Hynix and Toshiba saw growth of around 15% in this market.
NAND market 2018 outlook
For the 2018 NAND market, analysts predict not exactly the same.
Some believe the NAND market will be in balance by 2018, while others believe there will be oversupply in this market by 2018. The reason for this concern is that many suppliers are mass-producing 64-layer or 72 Layer NAND way to expand production capacity.
DRAMeXchange expects NAND production capacity to grow 43% by 2018 while market demand will only increase by 38%. Obviously, this will create oversupply which may result in a price drop.
At present, some signs have even been seen on the market. In the first quarter of 2018, the average sales price of Micron’s NAND products dropped by 3%, which is obviously not a good sign.
However, the impact of this indeed for Samsung will be much smaller, because Samsung has great technical advantages in 3D NAND, but still does not rule out future competition from Micron pressure.
Micron, 2017 earnings milestone
Like Samsung, in 2017, Micron’s revenue also hit a new high due to the memory market.
Specifically, Micron’s financial reports have experienced double-digit increases for six consecutive quarters.
Micron’s 2018 fiscal first-quarter report, ending in November 2017, shows that Micron’s revenues increased 11% to 6.8 billion, up from analysts’ expectations of 6.3 billion.
The main drivers of this growth are the strong demand in the DRAM market, the steady growth of NVIDIA graphics cards, and the impact of data centers and other factors.
In addition, Micron contributed record financial performance to the SSD products used in the data center.
After entering 2018, many analysts are predicting the future memory market.
Many believe the consumer demand will be met as suppliers’ availability increases. However, it is worth noting that as mentioned earlier, since the new capacity required in 2018 will require at least two Year’s time to climb, memory prices will remain high in the short term.
What’s more, there will not be a cliff-like decline in any recession, especially with the advent of artificial intelligence and more IoT products in 2018, which will further expand the consumer-grade memory market. For example, we have seen NVIDIA graphics cards, Tesla cars have made a lot of memory requirements.
Analysts believe that these will further promote the growth of Micron’s revenue, the automotive market, the car memory is a dedicated memory, the price will be higher.
With the growth of market segments such as automobiles and data centers, analysts believe Micron will continue to grow in these markets.
What will happen with the 2018 Micron?
As we said earlier, the DRAM market is a market with inelastic demand. In 2018, the DRAM market will continue to grow. Micron, the forerunner in the market, is also pushing the next generation of new technology.
In the first quarter of fiscal 2018, Micron’s 1X DRAMs have achieved relatively mature production volume and are expected to surpass the 20nm of the previous generation by the end of 2018.
However, due to new technology inputs, Micron said that this year Micron DRAM market growth rate will be lower than the market average.
On the other hand, at CES 2018, we have already seen some clues about DDR5 technology in the future. Although this product will be hard to be commercialized by 2020, it will consume more than its predecessor Low power.
In terms of NAND products, Micron expects to launch the second generation of 64-layer 3D NAND products in the second half of FY2018 and trial production of third-generation 3D NAND products in the second half of 2018. Although Micron did not disclose the details of its third-generation 3D NAND products, but know that Samsung’s third-generation 3D NAND products are 72 layers.
Micron believes that its NAND product growth rate will be higher than the market average growth rate of 50%.
From the above situation, we can see that Micron has been continuously investing and updating products in both DRAM and NAND products.
NVIDIA and the semiconductor industry trends
At the industry summit held in January 2017, there have been opinions that the Internet of Things, autonomous driving, 5G, AR / VR and artificial intelligence are the future directions of development. These technologies will bring about 30 billion U.S. dollars by 2025.
In addition to 5G, NVIDIA has long been concerned about the above several other technical trends. In fact, the GPU it produces currently has great advantages in the areas of artificial intelligence and autonomous driving, and NVIDIA is also investigating the possibility of GPU applications in the Internet of Things, and in particular the Industrial Internet of Things.
A report released by Jon Peddie Research released a detailed analysis of GPU applications on different terminal platforms. From the figure above we can see that mobile devices and computers are still the largest GPU application market.
At present, NVIDIA, AMD and Intel are the three main GPU suppliers. Among them, Intel’s shipments accounted for 68% to 70% of the overall market, but the GPU it provides are mainly integrated in the processor used by the PC.
NVIDIA GPU is a separate GPU, accounting for more than 70% market share.
Independent GPUs provide consumers with better graphics performance, whereas Intel GPUs can only handle relatively simple graphics.
In the past few years, NVIDIA has been widely applied to its independent GPU in addition to the PC market, artificial intelligence, intelligent driving, Internet of Things and industry and other market segments.
Many analysts believe that now NVIDIA is at the cusp of the fourth technology transfer. There are many possibilities for development, and even compared it to Apple’s ten years ago.
In the past year of 2017, we have seen some areas such as artificial intelligence and e-sports propelled NVIDIA revenue growth. These growth points will continue in 2018, meanwhile, the new growth point of autonomous driving may also break out.
It can be said that 2017 Nvidia is invincible, and 2018 also has a lot of competition.
In the past three years, NVIDIA’s revenue more than doubled from $ 4.7 billion in 2015 to $ 9.7 billion in FY 2018. This growth is also the NVIDIA into the world’s top ten semiconductor companies ranks.
In addition, the strong growth momentum of NVIDIA also comes from the data center. In this market, NVIDIA has also enjoyed a three-digit increase in the past six quarters. In addition, NVIDIA has witnessed the increasing popularity of electronic sports. NVIDIA also needs a better discrete graphics card to provide higher performance. The trend is also for NVIDIA to provide more and more customers with more detailed products.
NVIDIA’s latest Volta GPU architecture has received strong customer reaction. This product also contributed to GPU revenue in the data center. In 2018, NVIDIA revenue in this market reached 20%.
NVIDIA will continue to grow in 2018, but due to pressure from competitors and growth rate.
For now, the biggest competitor of NVIDIA is Intel, which is seeking cooperation with AMD in an attempt to enter the independent GPU market.
In addition, Intel’s processor is also used by Google for autonomous vehicles.
However, for NVIDIA, it is delightful that in 2018 we will see the launch of NVIDIA-equipped vehicles on the stage, and NVIDIA will launch its own car platform to help drive the development of autonomous vehicles.
In 2018, how the PC market will affect semiconductor companies
From the above, we can see that, whether it is Micron or NVIDIA, the PC market in its revenue still occupy not a small proportion. Intel and AMD also occupy a significant share of these two markets.
2017 is a good year for the PC market, where the slowdown in PC market sales has finally slowed down. Although the traditional desktop market is still declining, sales of laptops and gaming computers have increased rapidly. Although the forecasts for the PC market from Gartner and IDC are different, they both expressed similar views.
For 2017, Gartner expects global PC shipments to drop by 3.2% year-over-year to 425 million units. However, the data given by IDC dropped 2.7% to 423 million units.
IDC said that although the memory out of stock, but the performance of the traditional computer market has more than expected. In 2018 the situation will be better.
Gartner expects PC shipments to increase by 0.8% to 426 million units by 2018, while IDC believes the PC market will continue to decline, down 4% from a year ago to 400 million units.
AMD 2018 can maintain growth
When it comes to GPU, we have to mention AMD.
As Intel in the field of CPU, NVIDIA’s largest competitor in the field of GPU, AMD has seen significant growth in the past two years.
Finishing AMD The first quarter of 2016 to the latest quarter can be found, in fact, AMD from the second quarter of 2016 has been the continuous growth of performance, turnover is all the way to sing. In terms of profit, though, the company lost a huge loss of 109 million U.S. dollars in 2016, but by 2017, the company started to turn around again.
In terms of products, AMD has released various new products and consumer terminals frequently in the past two years. Not only AMD Rui Long 3 Series, 5 Series and 7 Series, but also high-end Threadripper processors are firmly in the hands of different consumers The demand. In terms of graphics cards, it launched Vega, focusing on new areas such as AI, game design and visualization. In the server market, released EPYC, return to the data center market; also introduced Rui Long mobile processor.
AMD expects fiscal 2017 revenue growth of 22.5% to 5.2 billion US dollars, while analysts expect the chip maker in fiscal year 2017 revenue up 23%. However, analysts expect this growth to slow to 12.5% in FY 2018.
In December 2017, AMD partnered with Intel to provide a discrete GPU for the latter’s gaming mobile PC platform. This partnership may increase Intel’s PC processor market revenue. By combining its GPUs with Intel’s processors, AMD can easily increase its GPU market share and compete with NVIDIA.
In 2018, AMD also plans to launch a lot of new products, so AMD can really survive in 2018 Intel’s competition?
2017 is a very busy year for AMD.
In the just-concluded global technology event CES, AMD introduced a variety of heavyweight products, and announced a substantial price plan. Ryzen 7 1800X high-end price cuts by 40%. Significant price cuts over Intel processor vulnerabilities, comprehensively enhance the company Ryzen and Threadripper chips and Intel chips of similar competitiveness, will help grab a certain market share in the future.
Also at CES, Dr. Su Tzufeng, AMD’s CEO, mentioned that Ryzen products provide the data processing power that rivals the Intel Core i5-8400 processor and the NVIDIA GT 1030 graphics card, but at a cheaper price of $ 120. This will be the good news for those who want to save money but are not willing to sacrifice their computing power.
AMD is operating in a duopoly market. Its goal is not to surpass its competitors by introducing state-of-the-art technology, but to provide competitive products that offer consumers cheaper options and help them gain market share.
In 2017, AMD foundry partners announced a 12-nanometer technology node. So, AMD may upgrade its Ryzen series from 12nm to 7nm.
At present, AMD has provided a 12nm upgrade version of the Ryzen desktop processor sample, which was released last year, was using 14nm process technology. The chip will be put into production from April, using Globalfoundries upgrade process announced last year. At the same time, Ryzen 2 design has also been completed, but AMD did not give details of internal or shipping date.
AMD’s first 7nm GPU will be a version of its Vega design aimed at machine learning. AMD will catch up with its rival Nvidia on the GPU side, which dominates this nascent field after the launch of Volta in 2017, with Volta becoming its first chip with machine-learning hardware.
Why 2017 is important to Intel
Finally, let’s take a look at Intel.
Although, in 2017, Samsung took the No. 1 spot on storage surpassing Intel, Intel did not sit still.
It is working hard to expand its business area to capture several other markets: the Internet of Things, 5G, AR / VR and Artificial Intelligence.
After the acquisition of Altera, due to strong growth in the data center, Internet of Things, etc., Intel’s revenue in 2017 relative to 2016, is expected to grow 4.4%.
As the world moves toward intelligence and the Internet of Things, Intel is working with its rivals in areas it believes are mutually beneficial.
In addition to the previously mentioned cooperation with AMD, Intel also announced several technical aspects of the car and 5G.
Intel is currently transitioning from a PC-centric to a data-centric company. 2016 and 2017, Intel’s corporate structure has undergone significant changes. 2018 More changes can be seen in the company’s strategy.
Wall Street analysts expect Intel’s fiscal year 2018 revenue rose 3% to $ 63.8 billion. However, this growth estimate is based on the prevailing market conditions and will vary with changing trends.
Intel currently offers GSM (Global System for Mobile communications) to provide modems for Apple’s iPhone handsets. The company is developing its own CDMA modem and expects to offer CDMA modems for the iPhone by 2018.
Intel is also competing with Qualcomm in the 5G competition. Both companies launched their 5G modems in 2017.
In addition, Intel is working with more and more automotive manufacturers on the development of autopilot programs that are dedicated to auto-emblem and state-of-the-art AI (Artificial Intelligence) technology.
Intel 2018 will be what kind of development
In addition to the new market, Intel can continue to grow in the PC market.
2018 You can see the long-awaited launch of the 10-nm node, which will make Intel a leading technology provider.
Intel demonstrated the performance of the 10-nanometer Cannon Lake desktop processor at CES 2017, but did not reveal information about the 10-nanometer node. In fact, Intel introduced the 14-nanometer eighth generation Coffee Lake processor by the end of 2017.
Now, Intel has changed its product roadmap, the node transition to become longer.
According to Intel’s original plan, the production of the old node will no longer be made when the conversion to the new node is completed. However, in 2018 we may see two nodes coexist.
At the end of 2018, Intel is likely to launch the Ninth Generation Cannon Lake or Ice Lake CPU at 10nm, which will co-exist with the 14nm Coffee Lake CPU.
If Intel further postponed its launch of 10nm, it will lose its technical advantages.
Intel’s Artificial Intelligence Innovation
As the global leader in the PC industry, Intel is committed to promoting the development of the traditional PC industry through technological advances on the one hand, and has gradually identified a number of key players including PCC Smart, autonomous driving, precision medical, 5G and other force direction.
In these new business areas, Intel is most likely to achieve increased chip business capabilities with artificial intelligence and autonomous driving.
Focus on autonomous driving, March 13, 2017, Intel announced the acquisition of Israeli company Mobileye for 15.3 billion US dollars. Mobileye’s algorithms and data are likely to become the monopoly market giants in the more subtle, core technology-based automotive market. Data shows that Mobileye’s technology has infiltrated almost into the mainstream automobile factory, and Mobileye products are used by automobile manufacturers such as Tesla, BMW, GM, Volvo and Ford.
In the area of artificial intelligence, Intel’s $ 350 million acquisition of Nervana Systems, a deep learning company, in August 2017 was seen as a catalyst for Intel’s AI strategy. In order to promote artificial intelligence performance bottlenecks and technological popularization, Intel has established alliances, including Google and other giants, and at the same time, it cooperates with global organizations to provide developer training courses so as to build an ecosystem involving artificial intelligence technology upgrading, education and training, application optimization and the like .