Semiconductor Super Cycle Begins Again in 10 Years

The ‘super-cycle’, which means long-term price increases in the semiconductor market, has began in 10 years. In particular, DRAM prices have more than doubled in more than a year, while semiconductor companies such as Samsung Electronics and SK Hynix are achieving record high results.

It is predicted that the price increase will continue for the time being due to supply shortages in DRAM and NAND flash, which are the two axes of memory semiconductors. IHS Market, a market research firm, predicted that the memory semiconductor market would surpass $ 100 billion for the first time this year. Compared to last year’s $ 78.6 billion, it is about 30% rapid growth.

Experts analyze that the super-cycle of the memory semiconductor market, which has been gradually rising since the second half of last year, is different from the past. Since 1985, there have been two super cycles in the semiconductor market. The super cycle, which started in 1986, has been growing rapidly for ten years until 1995 due to the increase in PC demand. The second super cycle took place from 2002 to 2007 with the proliferation of digital cameras and the rapid growth of demand for SD cards using NAND.

“If we look at the past history of the memory semiconductor market, the market has changed mainly due to NAND demand since the 2000s,” said Lee Se-cheol, an analyst at NH Investment & Securities. “We expect demand for 3D NAND It is being done. ”

There are many analyzes that the memory semiconductor industry has not yet reached the inflection point. The price rise is expected to continue for the time being. Kim Sun-woo, an analyst at Meritz Securities, said, “Historically, the peak of the DRAM market has been formed only by ‘excessive responses from suppliers’ rather than ‘slowing demand’.” But this time, It is not happening. ”

In fact, memory semiconductor makers are concentrating on securing productivity from micro process changes rather than new capacity additions. However, there is also a part where the increase in supply is inevitably delayed due to the fact that the micro process change is not proceeding as fast as in the past. Lee Se-chul, an analyst at Samsung Electronics, said, “Currently, Samsung Electronics has an overwhelming share of DRAM and NAND at 46% and 36%, respectively. This is less than 30%. ”

However, memory semiconductor makers are adjusting their supply to focus on securing profitability, which should continue for some time.

“In 1994-1995, when the semiconductor industry was in a peak cycle, each semiconductor company invested in a new factory with rosy hopes, and the supply shortage quickly disappeared,” said Hwang Min-seong, an analyst at Samsung Securities. The company is hesitant to invest in new factories because it is in a wait-and-see atmosphere. Hynix is ​​expected to complete its China plant in 2019, and Samsung Electronics is expected to start operating the new plant only at the end of next year.

One of the reasons why supply can not keep up with demand is the price sector. In the industrial world, demand for information technology (IT) such as artificial intelligence (AI), big data, and machine learning is not covered by existing computing structures. In order to solve this problem, it is necessary to increase the capacity of DRAM. Memory semiconductor makers are not launching unless profitability is secured.

The memory semiconductor market is expected to continue rising until at least 2018. IHS Markets predicts that the memory semiconductor market will grow to $ 107 billion by 2013, with the DRAM and NAND markets growing by next year, but may decline slightly to $ 99.7 billion by 2019. But it is a natural adjustment phase rather than a market reversal. The market is expected to recover by more than $ 100 billion in 2020.

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