It is known that Micron and Western Digital of the US have started to acquire Kioxia (formerly Toshiba Memory), which is the second largest NAND flash market after Samsung Electronics. There is a promising that it will have a minor impact. It is analyzed that the expansion of DRAM supply will be limited due to the decrease in DRAM facility investment by memory companies.
According to the semiconductor industry on the 4th, there is an expectation that if the acquisition of Kioxia is actually promoted, the’Dram Big Cycle’ can prolong longer than expected. This is because all major DRAM manufacturers are faced with a’investment dilemma’ in which all major DRAM manufacturers are forced to hesitate to invest even though prices are soaring due to shortage of DRAM supply.
Currently, the global DRAM market is dominated by three companies, including Samsung Electronics, SK Hynix, and Micron. According to the market research firm Trend Force, the market share of the three companies reached 94.6% as of the fourth quarter of last year.
Unfortunately, large-scale DRAM investment is not easy for all of these’Big 3′. If Micron acquires Kioxia, its ability to invest in DRAM will inevitably be limited in the process of raising funds.
The situation is the same for SK Hynix. By the end of this year, out of the 9 billion dollars in the acquisition fund for the Intel NAND business, 7 billion dollars (about 7.9 trillion won) must be paid to Intel. As of the end of last year, the total cash and cash equivalents of short-term financial products and short-term investment assets amounted to KRW 5 trillion, so there will be no major difficulties in raising funds for acquisition, but new DRAM investments are burdensome. SK Hynix previously announced that it will conduct investments conservatively this year due to market uncertainty caused by Corona 19, etc.
Samsung Electronics is also in a difficult situation to actively execute DRAM investment this year, concentrating its finances on foundry (consigned semiconductor production) and NAND investment. In the semiconductor industry, while Samsung Electronics is expected to invest more than 10 trillion won in foundries and 7 trillion won in NAND, new investments in DRAM are expected to be around 5 trillion won. Foundries are the most aggressive investment areas Samsung Electronics will invest in this year. In order to respond to the rapidly increasing demand for system semiconductors such as 5G chips and image sensors, and to pursue TSMC, the world’s No. 1 foundry, large-scale investment is urgently needed.
Aggressive investment is expected in the NAND sector as well. This is to counter Micron, which is strengthening its process development capabilities, such as developing and mass-producing 176-layer 3D NAND with SK Hynix, which is about to take over Intel’s NAND business. According to China’s state-run Global Times, Samsung Electronics started installing equipment to expand the 2nd Xi’an semiconductor plant in the middle of last month. The Global Times reported that once the expansion is completed and it goes into full operation, it will have the ability to produce 130,000 12-inch wafers per month.
On the other hand, Samsung Electronics’ DRAM investment is expected to remain the status quo. Although investment in new facilities of 40,000 units per month is expected, the conversion of part of the 11th DRAM line to an image sensor line will reduce the amount of DRAM investment by 10,000 units per month.
“As SK Hynix acquires the Intel NAND business, Micron is inevitably concerned about the deterioration of its NAND market competitiveness, and it is highly likely to be quite active before the acquisition.” “If you hesitate to invest in DRAM from Hynix to Micron, there is a possibility that this DRAM big cycle will last for at least two years.”
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