Samsung likely to lead us through the gloom

SamsungWhile the world’s semiconductor industry is in a bit of a sulk, Samsung is expected to cope much better and might make a bob or two.

Intel has had to cut 12,000 jobs, Qualcomm has said fiscal third-quarter chip shipments could fall as much as 22 percent and SK Hynix saw a 65 percent slide in quarterly operating income – its weakest result in three years.

Samsung, while hurting, is not hurting as much. In fact some analysts expect to see a drop of 10 percent in January-March from a year earlier. But that is really a scratch instead of the others, which have more or less lost limbs.

This is because it is in the right place as clients shift towards premium power-conserving DRAM chips for smartphones, as well as solid state drives for data storage using 3D NAND chips.

The technological gap between Samsung and its competitors in fields such as DRAM and NAND has been widening.  Samsung’s chip operating profit is expected to be nearly five times that of SK Hynix.

Samsung also runs the world’s biggest smartphone business, giving it a captive customer for its chips that none of its rivals have.

Healthy initial sales for Samsung’s new flagship Galaxy S7 smartphones are expected to be the main driver of first-quarter operating profit, which the firm has said likely rose 10.4 percent from a year earlier to $5.8 billion.

Samsung’s NAND chip prospects are also expected to do well. Samsung was the first to mass produce NAND flash chips using a technology called 3D NAND, helping it assume a dominant position in higher-margin products such as solid-state hard drives for computers and servers.

Some analysts think that Samsung’s  NAND revenue will climb 16 percent and NAND operating profit to jump 69 percent this year. Shipments will also likely outpace the industry average, allowing Samsung to seize more market share.

NAND rivals Toshiba , SK Hynix and Micron are three years behind technology-wise. Samsung has better production technology for DRAM chips, saying the firm is ahead of its closest rivals by at least a year.

Samsung commanded 58 percent of the mobile DRAM market as of the fourth quarter of 2015, according to TrendForce. Mobile DRAM revenue also accounted for more than half of Samsung’s overall DRAM sales for October-March.

Samsung mass produces HBM2 4GB DRAM

Samsung DRAMSamsung has begun mass producing the industry’s first 4-GB DRAM package based on the second-generation High Bandwidth Memory (HBM2) interface.

The DRAM is headed for use in high performance computing (HPC), advanced graphics and network systems, as well as enterprise servers.

The new DRAM is more than seven times faster than the current DRAM performance limit which means super-fast responsiveness for high-end computing tasks including parallel computing, graphics rendering and machine learning.

In a statement Samsung’s Sewon Chun, senior vice president, Memory Marketing, Samsung Electronics said that by mass producing next-generation HBM2 DRAM, the outfit can contribute much more to the rapid adoption of next-generation HPC systems by global IT companies.
“Using our 3D memory technology here, we can more proactively cope with the multifaceted needs of global IT, while at the same time strengthening the foundation for future growth of the DRAM market.”

After all who doesn’t need their multifaceted needs proactively coped?

The 4GB HBM2 DRAM uses Samsung’s most efficient 20-nanometer process technology and advanced HBM chip design, satisfies the need for high performance, energy efficiency, reliability and small dimensions making it well suited for next-generation HPC systems and graphics cards.

The 4GB HBM2 package is created by stacking a buffer die at the bottom and four 8-gigabit (Gb) core dies on top. These are then vertically interconnected by TSV holes and microbumps. A single 8Gb HBM2 die contains over 5,000 TSV holes, which is more than 36 times that of a 8Gb TSV DDR4 die, offering a dramatic improvement in data transmission performance compared to typical wire-bonding based packages.

Samsung’s new DRAM package features 256GBps of bandwidth, which is double that of a HBM1 DRAM package. This is equivalent to a more than seven-fold increase over the 36GBps bandwidth of a 4Gb GDDR5 DRAM chip, which has the fastest data speed per pin (9Gbps) among currently manufactured DRAM chips. Samsung’s 4GB HBM2 also enables enhanced power efficiency by doubling the bandwidth per watt over a 4Gb-GDDR5-based solution, and embeds ECC (error-correcting code) functionality to offer high reliability.

In addition, Samsung plans to produce an 8GB HBM2 DRAM package within this year. By specifying 8GB HBM2 DRAM in graphics cards, designers will be able to enjoy a space savings of more than 95 percent, compared to using GDDR5 DRAM, offering more optimal solutions for compact devices that require high-level graphics computing capabilities.

Worldwide semi capital spending to fall

Silicon wafer - Wikimedia Commons -Gartner said it expects capital spending in the semiconductor industry to fall by 4.7 percent this year, a bigger drop than the market research company predicted in the last quarter.

Capital spending will amount to $59.4 billion this year.

David Christensen, a senior research analyst at the company said the decline is due to people buying less electronics and the world economy.

But he said things will get brighter.

“The longer term outlook shows a return to growth, although wafer level manufacturing equipment is expected to enter a gentle down cycle in 2016 due to the loss of the supply and demand balance in the DRAM market.”

The DRAM market regularly goes through phases of glut and famine.

Spend on wafer manufacturing equipment will fall by 2.4 percent, but the lithography sector will grow by 1.4 percent. Christensen predicts “relatively strong growth” from 2017 through to 2018.

DRAM prices will continue to free fall

Samsung DRAMMarket research company Trendforce predicted that prices of DRAM will keep falling in 2016.

Trendforce believes that the DRAM market is an oligopoly and because of this DRAM manufacturers can stay profitable even though they’re continuing to make too many modules.

Avril Wu, a research director at Trendforce, said that demand and supply bit growth rates will be 23 percent and 25 percent respectively.

Average prices will drop and growth will depend on manufacturers shifting their production towards 20 nanometre processes.

SK Hynix and Micron will move to that process next year – Samsung is already producing modules based on that technology.

Wi said that DDR4 will replace DDR3 – that’s already happened in the server market but will shift to new PCs and notebooks next year.

China is attempting to become a player in the DRAM market but the “oligopoly” of Micron, SX Hynix and Samsung will let them maintain their grip on the market.

Micron snaps up rest of Inotera

Samsung DRAMUS memory maker Micron has bought the rest of Inotera, strengthening its position in the DRAM market.

Micron already owned a third of Inotera and it will pay $3.2 billion to buy a majority share.

The situation is a little complicated, according to Taiwanese wire Digitimes, because Formosa Group, which owns its own memory company Nanya, has 32 percent of the shares of Inotera.

But it’s understood that Formosa will vote in favour of the acquisition. At the same time, Micron said it has made a contract to give Nanya an option to license its new technology.

Micron already has a deal with Nanya to license its 20 nanometre technology.

All in all, this gives Micron a far stronger position in a market largely dominated by South Korean giants Samsung and Hynix. Earlier this year, Tsinghua – a mainland China state-backed comglomerate, made a failed bid to buy Micron..

Semiconductor sales expected to fall

Samsung DRAMLast week the semiconductor industry’s trade body predicted that sales would rise modestly in 2016.

But a market research company today said the opposite, and predicted that sales for 2016 will fall by 0.6 percent compared to this year, to stand at $329 billion. The culprit is the memory market.

2014 saw a 10.5 percent growth figure, according to Trendforce, which predicts that a continuing steep fall in the sales of memory products will “drag down” semiconductor sales revenues.

Memory is a big problem with sales of chips only growing by 1.8 percent in 2015. There’s a big problem with oversupply, and Trendforce believes both DRAM and NAND flash sales will fall.

Trendforce, like other market analysts believes that PC sales will stabilise because most of the stock piled up in warehouses and factories will have worked their way through the channel.

The automotive industry will buck the semiconductor trend with shipments and prices rising in 2016. Automotive applications will also help increase sales of analogue integrated circuits.

Trendforce thinks that Apple alone accounts for almost 10 percent of revenues for the foundry business.

Samsung mass produces 128 gigabyte DRAM

Samsung DRAMSouth Korean technology giant Samsung said it has started mass production of 128 gigabyte DDR4 DRAM modules.

The modules are aimed at enterprise servers and for data centres.

Samsung said the modules have the largest capacity and the best energy efficiency of any other modules but also operate at high speed.

The modules include 144 DDR4 chip arranged into 36 four gigabyte packages using 20 nanometre process technology.

Samsung claims that the 128GB modules can operate at up to 4,400 megabits per second, and cut power usage by as much as 50 percent.

The company said that it will provide a complete line of the high performance modules including 128GB load reduced DIMMs.

It is also aiming to introduce these types of modules but with higher performance with data transfer speeds of 2,667Mbps and 3,200Mbps.

DRAM revenues dropped in the third quarter

Samsung DRAMOver production of dynamic random access memory (DRAM) fell in the third quarter by 1.2 percent – bucking the trend usually followed in the quarter.

Manufacturers are moving production from PCs to server and mobile memory because of stable prices and higher margins, according to analysts at DRAM Exchange.

The share of mobile DRAM, used in smartphones, rose from 33.7 percent in the second calendar quarter of this year to 40 percent in the third quarter.

However, according to Avril Wu, an assistant vice president at DRAM Exchange, said that oversupply will continue for quite some time and DRAM prices are expected to fall in the immediate future.

The two Korean giants – Samsung and Hynix – continued to have similar operating margins in the third quarter compared to the second quarter – that is to say 47 percent and 28 percent respectively.

However, Micron, the only USA DRAM manufacturer, saw its profits margin drop to 15 percent during the third quarter.

Smartphones save DRAM’s day

Samsung DRAMPressure on the prices of dynamic random access memory (DRAM) will be limited because of demand for smartphones in the fourth quarter of this year.

That’s according to Trendforce which warns, however, that this is a temporary situation.

Avril Wu, an executive analyst at Trendforce, said that better smartphone shipments will drive demand for mobile DRAM. That means the decline of its average sales price will be within five percent during the fourth quarter.

But Wu said that the new year will show quarterly price declines of between six to eight percent as demand falls and supply increases

The next generation of smartphones will use a type of mobile memory called LPDDR4 – and only Samsung is able to manufacture in bulk right now.

Other big manufacturers including SK Hynix and Micron will be up to speed by the end of next year.

Intel’s 3D XPoint fixes bottlenecks

bottleneck-constraint-lean-managementChipzilla and Micron have been working on 3D XPoint technology which they say will close the performance gap between memory, CPU, and networking.

Until now details of the project have been kept under wraps, but now it seems the pair are keen to talk about it. All Intel would say is that it promised about 1,000 times the performance of NAND flash, 1,000 times the endurance of NAND flash, and about 10 times the density of DRAM.

3D XPoint technology is a 3D stacked memory with high-speed interconnects that can be used like DRAM and like flash storage.

Intel CEO Brian Krzanich is now saying that Intel will sell the memory under the Optane brand, and The Next Platform.

Memory is a bottleneck forcing CPUs to wait. Krzanich Optane would speed things up so processors are no longer waiting for data to arrive from memory or storage, in this case flash drives.

Krzanich showed a pair of matching servers. One server had Intel’s P3700 NAND PCI Express SSD and the other was a prototype Optane SSD. The Optane SSD outperformed the P3700 by 4.4 times in IOPS with 6.4 times less latency.

He said that Intel would release Optane next year and will “transform how we think about data and memory and storage.” The company will also come out with Optane DIMMs later this year for early testers. These will combine the performance of DRAM with the capacity and cost of flash.

A two-socket server with Optane DIMMS will have a total of 6 TB of addressable memory, “virtually eliminating paging between memory and storage, taking performance truly to a whole new level.”