According to TrendForce statistics, in the fourth quarter of 2023, the total revenue of the global DRAM industry reached $17.46 billion, up 29.6% year-on-year. After two consecutive years of decline, the storage market is finally back on track, and the prices of related products are on a steady upward trend.
1. Market reshuffle: the end of the DDR3 era
In the face of this change, Samsung and SK hynix, the two major DRAM suppliers, have decided to go all out to produce high-bandwidth memory (HBM) and mainstream DDR5 memory, and plan to phase out the supply of DDR3 niche DRAM.
Samsung and SK hynix, the world's largest DRAM suppliers, announced that they will discontinue the production of DDR3 memory and switch to DDR5 and HBM production, which is a major change in the storage industry. This decision not only led to an increase in the price of DDR3 memory, but also sent a signal to the entire market that the dominant specifications in the future storage market will be DDR5 and HBM. This change poses challenges to industries that rely on DDR3 memory, but it also brings opportunities for technological upgrading and industrial restructuring.
It is reported that SK hynix plans to raise the prices of its LPDDR5, LPDDR4, NAND, DDR5 and other products, with an increase of about 15%-20%. In fact, since the fourth quarter of last year, the price of SK hynix's DRAM products has risen by about 60%-100%.
2. Technology-driven: the rise of AI models
With the emergence of large AI models such as ChatGPT, Sora, and Suno, the demand for storage has grown explosively. Their appearance not only refreshes people's perception of artificial intelligence, but also makes large models a new hot spot for consumer electronics. Large models at home and abroad are constantly emerging, and they have almost unlimited demand for computing power and data, giving rise to massive storage needs.
From the perspective of the current application market structure, mobile phones, PCs and servers are undoubtedly still the three core application areas of storage technology. Unlike in the past, when hardware performance improvements were relied upon, the rise of AI devices such as AI phones, AI PCs, and AI servers, driven by generative AI technology, is profoundly impacting the demand for storage devices such as DRAM (Dynamic Random Access Memory) and NAND (Flash Memory).
Specifically, generative AI technology requires large amounts of data for training and inference, and the storage and access speed of this data directly affects the performance of AI applications. Therefore, high-performance DRAM and NAND storage have become essential for AI terminals. This requires not only a larger capacity of storage devices to accommodate massive amounts of training data, but also faster read and write speeds to meet the real-time requirements of AI applications.
Against this backdrop, the demand for DRAM and NAND for AI devices has increased dramatically. And this price increase is not simply market speculation, but has solid technology and market demand support.
3. Differentiated competition among domestic and foreign storage companies
Compared with the memory chip giants at home and abroad, the participants in the domestic storage industry have embarked on a unique path. Among them, Longsys has emerged in the domestic market with its unique "eSSD+RDIMM" product design, combination and continuous supply capabilities. This company has created a unique way, starting from the service model, and in the pursuit of the best balance between efficiency and cost, it has innovatively launched the TCM model. This model cleverly integrates technology, contract and manufacturing to create competitive and personalized storage products, solutions and high-quality services tailored to customers.
Behind this seemingly simple service logic, Longsys has a deep technical accumulation and precise control of the industrial chain. Through the acquisition of Yuancheng Suzhou and Zhiyi Zilia in Brazil, Longsys has successfully built a complete industrial chain covering integrated packaging design, firmware algorithm development, memory chip testing and other links, laying a solid foundation for the long-term development of the company.
Although the adjustment of product concept and business model is not obvious, the financial report data reveals the strong development momentum of Longsys. According to the first quarter report of 2024, the company's main revenue increased by 200.54% year-on-year, and the net profit attributable to the parent company increased by 236.93% year-on-year. This impressive performance fully proves Longsys' strong profitability and good development prospects in the market competition.
It can be said that with its unique service model, complete industrial chain layout and innovative product concept, Longsys has embarked on a road full of vitality and vitality on the domestic storage track. In the future, we have reason to believe that Longsys will continue to shine in the storage industry and contribute more to the development of domestic storage technology.
summary
In the context of the transformation of the storage industry, the storage industry will face more challenges and opportunities in the future. With the continuous advancement of technology and the continuous growth of market demand, the storage industry will continue to maintain the momentum of rapid development and lay a solid foundation for the arrival of the digital era.