Specialist
Senior executive at Insignis Technology Corp Inc
Agenda
- Outlook for memory sector as companies begin to cut CAPEX
- CHIPS (Creating Helpful Incentives to Produce Semiconductors) Act – implications for memory sector and major players
- NAND and DRAM supply-demand trends and capacity expansion outlook
- Competitive dynamics among SK Hynix (KRX: 000660), Micron (NASDAQ: MU), Samsung (KRX: 005930) and others
- Pricing dynamics heading into Q4 2022, pricing trends and production and shipment growth estimates for DRAM and NAND
Questions
1.
Is memory the market-leading indicator of pricing and swings and the general health of the semiconductor industry? Why or why not?
2.
Speaking of a downturn, why do you think the memory industry is so prone to cyclicality, compared to the semiconductor industry?
3.
How would you evaluate the current state of NAND and DRAM markets as we look into the beginning of Q4 2022, having just passed Q3 2022? What would you say are some key trends driving this industry?
4.
You mentioned availability getting better. Would you say growing investor and consumer sentiment towards consumption and their opinions towards EV is helping availability and freeing up some supply chain bottlenecks?
5.
How much of the ebb and flow around EVs will offset the supply and demand imbalances? What will be the effect of that boom?
6.
How do you assess developments within SRAM [static random access memory]? How do you think RAM will evolve as chips scale in size?
7.
You mentioned adoption of the new technologies. How will that look in the memory industry, not only among the bigger names you’ve mentioned, but across the industry as a whole? How would you envision the general adoption curve for new technologies?
8.
How are you sizing the current TAM for NAND and DRAM? Third-party estimates say this TAM could reach anywhere from USD 360bn around the end of the 2028. Looking back on FY21, we were sitting around USD 161bn. Given the cyclicality damages and the volatile nature, how do you think a 14.5% CAGR is justifiable?
9.
How do you see pricing playing out until the end of 2022? What’s been the impact on DRAM and NAND, percentage-wise?
10.
You mentioned in a previous Interview [see Forum Pulse: NAND & DRAM Pricing – Q2 2022 Update] that you foresaw some potential messy pricing issues as MLC [multi-layer cell] NAND develops. How do you think that has played out?
11.
Can you speak to current competitive dynamics among the memory giants? The last players we discussed were Micron, SK Hynix and Samsung, and you recently mentioned NXP. Have these players stayed relatively conservative in terms of output, and what do you think their approaches will look like as we head into FY23?
12.
Micron announced a 50% cut in WFE [wafer fab equipment] spending in its Q4 2022 earnings. What are your thoughts on the potential 2023 CAPEX levels for companies outside the US such as SK Hynix? Do you think this will be announced in the upcoming earnings announcement?
13.
Looking across industrial, medical, connectivity and communications in general, which segments are you most optimistic about in terms of growth or win memory? Can you quantify this?
14.
As memory chips get more specialised within the sub-sectors, how would you say the memory manufacturers are gearing themselves up to combat the declining demand we’re seeing?
15.
You mentioned the cloud and IoT [Internet of Things] connectivity. 5G and the cloud are ever-growing. What does that look like for memory, and what do the growing vertical dynamics across security, cybersecurity and memory look like?
16.
Which suppliers or specific elements are contributing most heavily to DRAM and NAND bit demand?
17.
How much of the demand you mentioned would you say comes straight from the PC smartphone market?
18.
How will events in China affect the memory industry? There’s certainly a lot going on there, starting with Huawei, but from a high-level perspective, how aggressive or competitive are China’s investments in DRAM and NAND? You mentioned some China-based companies, and I’m looking at players such as YMTC or CXMT. Would you say they’re caught up with the rest of the industry? What’s missing in terms of capacity and output and how much further would they need to go?
19.
What would the companies’ global market share look like?
20.
How have China’s coronavirus policies and recent lockdowns affected memory for supply chains? Do you think any company is currently positioned better than competitors to take advantage globally?
21.
What became of SK Hynix’s January 2022 acquisition of Intel’s NAND and SSD [solid-state drive] departments? What is Solidigm’s potential within the US?
22.
What are your thoughts on fabs and their future capacity, given the turbulent environment where we’re clearly seeing supply starting to outgrow demand? I mentioned Micron cutting its CAPEX by 50%.
23.
Could you speak to the fabs’ incentive or thoughts to find some sort of fungibility in their inventories? How can they help the supply issue, whether by repurposing some nodes for different functions, or through different end market products? Do companies have any plans?
24.
I know you said it’s pretty hard to tell in terms of relationships, but other than on the consumer demand of end market products, is there any catalyst in between the sub-sectors?
25.
Xenon wasn’t really of concern in your previous Interview, but I want to ask about neon given the Russia-Ukraine conflict and that Ukraine supplies 55% of the world’s semiconductor-grade neon. Of that, 90% comes to the US and is extremely important and crucial for EUV [extrema ultraviolet] and DDR5 [double data rate 5] production. What are your thoughts on supply concerns there, as there is a neon shortage?
26.
The CHIPS [Creating Helpful Incentives to Produce Semiconductors] and Science Act is a hot topic in the US. What does this Act mean for the memory sector specifically? How will companies in memory benefit? How might they gear up to take advantage of these incentives?
27.
Do you think there will be an opportunity to realise the issues you mentioned or do you think it will always be a race for the next fab?
28.
Continuing around international collaboration, VP Harris visited Japan last week and met with the heads of multiple top Japanese semiconductor companies. She mentioned how important the US-Japan collaboration on creating a more resilient supply chain is. What are your opinions there and what opportunities do you think exist?
29.
Would you like to highlight anything else around NAND and DRAM that we should monitor in Q4 2022 and as we close out the fiscal year?
