Micron’s entry into DDR5 market: A boon for Samsung, SK Hynix

The emergence of a rival is usually a cause of distress for existing players.

Micron Technology Inc.’s entry into the DDR5 DRAM arena, however, will likely be a boon rather than a bane for DRAM chip market leaders Samsung Electronics Co. and SK Hynix Inc.

The US chipmaker recently said it has begun shipping its DDR5 server DRAM in support of industry qualification of next-generation Intel and AMD server and workstation platforms.

The new memory chip, according to Micron, enables up to an 85% increase in system performance over the previous version, DDR4.

DDR5, short for double date rate 5, is the next-generation DRAM chip, boasting faster speed and higher density with reduced power consumption compared to DDR4 chips. The latest memory is suitable for data-intensive supercomputing, artificial intelligence and machine learning applications.

Released in 2013, DDR4 accounts for 90% of the current server and PC DRAM market.

Samsung, the world’s largest memory chipmaker, unveiled the industry’s first 512 gigabyte DDR5 module based on High-K Metal Gate (HKMG) process technology in May 2021.

Last October, the company began mass production of the industry’s smallest 14-nanometer DRAM chips using extreme ultraviolet (EUV) technology.

SK Hynix, the world’s No. 2 memory maker, followed suit. It began producing 24 Gigabit (Gb) DDR5 DRAM with EUV lithography equipment last December.

NEW STANDARD TO SUPPORT FALLING PRICES

Samsung and SK Hynix are welcoming Micron’s entry into the DDR5 market as the new product is expected to support falling DRAM prices.

According to market tracker DRAMeXchange, the average contract price of 8Gb DDR4 came to $2.88 in July, down 14% from the previous month, amid a supply glut.

“DDR5 is becoming the new standard and demand for such chips will rise quickly as data continues to grow exponentially,” said an industry official.

“If the number of DDR5 DRAM players grows, it will accelerate the industry's shift toward the next-generation chip.”

According to market researcher Omdia, the share of DDR5 chips in the overall DRAM market including mobile DRAM is forecast to rise from 2% this year to 42% in 2026.

Write to Shin-Young Park at nyusos@hankyung.com
In-Soo Nam edited this article.