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Analysis |

Are we facing a memory divide?

Without a doubt, AI is the hype topic in technology at the moment. It’s significantly shaping and driving memory development as it needs high-speed, high-bandwidth and low-power memory technologies. Among these, it’s particularly HBM that is getting a lot of attention.

Author: Marco Mezger, Executive Vice President and COO of Neumonda 

Yole Group predicts impressive growth rates for HBM in 2024, and this is just the beginning, as the major memory players Samsung, Sk hynix and Micron are ramping up their HBM3 memories this year. This third generation is expected to get even higher densities and throughput. 

What makes HBM so special, but also expensive, is the stacking technology that requires a couple of different components: an interposer that’s at the base of the package, a CPU or GPU and a number of DRAMs stacked and connected with Trough Silicon Via (TSV) technology which results in higher density but is also more expensive to get on a chip. 

Why HBM is not for everyone

All these components add to the high costs of HBM. But even if costs weren’t an issue, there are other hurdles for smaller industrial customers. Demand is high and supply comes only from a limited number of manufacturers, and this has never been a good market condition for industrial customers. Not only is HBM a specialised product, it also requires its own logic, which makes it even more difficult to reach a volume to make it worthwhile for the big players. 

So we are seeing a memory divide looming, where industrial applications that require high-bandwidth memory need to be creative and find workarounds for the time being as they simply won’t be able to get HBM. Currently, there are two major challenges on the way to HBM for embedded and industrial customers: price and the underlying logic chip. Neumonda is currently exploring opportunities to fill this gap. At the same time, we are viewing alternatives to HBM that are viable opportunities for smaller-volume customers. 

High-performance alternatives

One of the alternatives is GDDR6 which is less complex and less costly and still offers high bandwidth and speed. However, the performance and speed are offset by a higher energy consumption. So for some applications, low-power DRAMs might be the better option. 

DDR5 is the other high-performance memory technology available today for commercial and industrial applications. It’s one of the growth drivers for many memory manufacturers as they are trying to compensate for the losses in the past year. Addressing this demand and, in an effort to get a share of the market, we are seeing more manufacturers launching DDR5 memory modules in various form factors. Some of the new DDR5 modules like the ones from Intelligent Memory or MEMPHIs also come in completely lead-free versions so OEMs don’t need to rely on exemptions to the RoHS directive for their new products. 

What does that mean for NAND and DRAM?

But even if you are not interested in the latest and greatest in memory technologies, it’s still important to keep an eye on the market to pick-up on signs of a technology shift. Although memory prices are starting to rise, manufacturers are still cautious about ramping up production. For example, Samsung’s NAND production is still only at 50% of its capacity despite the rising prices since the beginning of the year. And even if production were to ramp up now, it would take several months for the first products to actually be available. So it’s worth taking a close look at the demand for Flash memory and make sure the supply needed is actually available when it’s needed. 

Another important aspect in the demand planning is the manufacturing capability of the memory manufacturers. TrendForce has pointed out that the capital expenditure in manufacturing equipment has been at an all-time low. Once manufacturing ramps up again, the capacity will move to high margin products which inevitably means discontinuation of other products. We are already seeing first end-of-life notifications in DDR3, one of the memory technologies most broadly used in industrial applications. 2024 is an uncertain year when it comes to memory. It’s important to keep an eye out on the developments in the market to prepare for what’s coming. 

Neumonda was founded with the ambition to build the most comprehensive memory application expertise under one roof by combining memory distribution, product manufacturing and memory IP.

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June 13 2024 1:49 pm V22.4.55-2