South Asian technology, DRAM may be in short supply and is expected to turn profitable in the second half of the year

Source: Xinzhixun

    On January 10th, South Asia Technology, a DRAM giant under Formosa Plastics Group, held an online legal conference. General Manager Li Peiying stated that 2024 is a year of rising DRAM prices. Coupled with the recovery of the mobile phone market, the stimulation of high-end DRAM demand by AI, and the shift of the three major DRAM chip factories to producing DDR5, South Asia Technology will strive to turn profits in the second half of the year, which is conducive to the elimination of DDR4 inventory and even "there is a possibility of supply shortage in the future".

    Li Peiying pointed out that the DRAM market was not very ideal last year, so the sales volume of South Asian technology did not grow. It is expected that the situation will be better this year than last year. Now we have seen an increase in DDR4 prices, and the timing of DDR3 price increases will be slower.

    Li Peiying said that in the past, DDR3 accounted for about 40% of South Asia‘s technology revenue. Currently, it seems that the proportion will decrease, while DDR4‘s proportion will increase. As international giants mainly focus on high bandwidth memory (HBM) and DDR5, he expects DDR4 to have an opportunity to be in short supply this year.

    Regarding the overall market trend, Li Peiying believes that the DRAM market is improving quarter by quarter due to the growing demand for AI, which has affected the conversion of high-end HBM and DDR4 to DDR5. As for the price trend, it has been confirmed that prices will begin to rebound in the fourth quarter of 2023, and we are optimistic that there is a chance for a gradual upward trend to continue in 2024. However, Li Peiying reminds that external environmental variables, including geopolitical factors, European wars, and US China trade disputes, may still affect the strength of market demand recovery.

    As for the demand side, Li Peiying points out four key points. First, servers are encouraged by AI servers, and the IT spending of American cloud enterprises is the key point of observation. Second, new smart phones are launched. The average DRAM carrying capacity increases, and AI mobile phones will further upgrade the high-end mobile phone market. At this stage, we see that mobile phone sales in Chinese Mainland are also improving, and the future economic recovery in mainland China is the key point of observation.

    In terms of PC applications, Li Peiying said that inventory will gradually return to normal levels, and AI PCs will be upgraded to the high-end PC market simultaneously. As for consumer electronic terminal products, the demand for IP CAM, Netcom, industrial control, and automotive applications is relatively healthy, and consumer electronic products will steadily grow in 2024.

    In terms of technological advancement, South Asia Science and Technology is working hard to produce DDR5 products in small quantities by the end of the third quarter of this year. Initially applied on the server side, some are on the PC side. The bandwidth of the first DDR5 product will reach 5600MHz, and the second product is currently under design, with an estimated bandwidth of 6400MHz.

    Li Peiying stated that her second DDR5 will adopt the third-generation process, and in order to further improve the cost structure and speed, in addition to achieving a target of 6400 MHz, she also needs to have the ability of high-density and 3D IC technology.