Market Trends of APAC Dynamic Random Access Memory (DRAM) Industry
Data Centers' Growth to Drive the Market in the Region
- According to Cloudscene, as of January 2022, China had 447 data centers, only behind the United States, Germany, and the United Kingdom in the number of data centers worldwide. The number is anticipated to grow more. The region has many major data center players like Space DC Pte Ltd, AirTrunk Operating Pty Ltd, China Telecom Corporation Ltd, CtrlS Datacenters Ltd, Advantage Computers Limited, and others, which may further drive the studied market.
- The increase in investment and interest in data center technology can be observed in the innovation of the High Bandwidth Memory 3 (HBM3) DRAM chip, designed by Korea's SK hynix. The company creates and manufactures chips and sensors used in data centers, and the HBM3 boasts the fastest processing speed and biggest capacity in the world. These improved statistics spell a 78% increase in data processing speed over its predecessor, the HBM2E.
- The ROI in the region for data centers is lucrative for investors, thus fueling the demand for data centers and complimenting the growth of DRAM in the region. For instance, according to the CBRE Group, the median cap rate for hyperscale and operational colocation data centers in Beijing and Shanghai was 9.25.
- In the third quarter of 2022, Tokyo was the biggest data center market in the Asia-Pacific region, with a live power supply capacity of around 997 megawatts, 194.3 megawatts for under construction, and 935.3 megawatts in phased IT power. Hence, the significantly growing market for data centers across the region may propel the studied market over the coming years.
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China to Hold Significant Market Share
- China is investing billions of dollars into building its semiconductor sector, producing memory and logic chips, the two biggest categories of high-tech chips. In addition, with governmental support, the regional vendors have been increasing their production capacities to meet the increasing global demand for DRAM.
- For instance, in March 2022, ChangXin Memory Technology (CXMT) announced its plan to manufacture DDR5 in the Chinese market. CXMT's ambitions ramped up recently due to significant investment from its parent company, Ruili Integration. The company aims to invest in more R&D and boost production facilities/capacity.
- After successful trials of DDR5 production, CXMT will be setting up its mass production units by the end of this year. The company plans to launch more advanced 17 nm (LP) DDR5 and other advanced process memory chips in China. Such increased domestic production activities may challenge the existing market shares of Samsung Electronics and SK hynix, to name a few.
- The reduction or slowdown in the production of DRAMs in the market could lead to supply chain disruptions. A significant shortage can cause price spikes. The COVID-19 lockdowns in China negatively affected manufacturing, supply chains, and consumer demand for DRAM.
- However, to balance out the production in the region, a local China-based memory company, ChangXin Memory Technologies (CXMT), aims to start delivering samples of DRAM chips built using its in-house developed 17 nm process technology.
- According to the Ministry of Industry and Information Technology (MIIT), China aimed to install 2 million 5G base stations in 2022 to expand the country's next-generation mobile network. Mainland China currently has 1.425 million installed 5G base stations that support more than 500 million 5G users nationwide, making it the biggest network in the world, as per MIIT. The growing implementation of 5G in the country may increase the uptake of 5G-enabled smartphones, creating a positive outlook for the market.
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