With the memory chip industry expected to hit an all-time high this year, a forecast says memory semiconductor revenue could grow to as much as double that of foundries (contract chip manufacturing).
According to market researcher TrendForce on the 9th, amid shortages and a sharp price surge, this year's global memory market revenue is projected at $551.6 billion, up 134% from a year earlier. Over the same period, foundry market revenue is forecast to grow 25% to $218.7 billion, with the memory chip market expected to reach 2.5 times that of foundries.
TrendForce said, "This AI-driven cycle is showing far stronger demand recovery and pricing power than in 2017."
TrendForce said, "In the past, end-device (set) manufacturers led the cycle, but this time cloud service providers (CSPs) are leading," and added, "CSP purchase volumes are increasing exponentially, and their sensitivity to price fluctuations is relatively low, allowing for much higher price hikes than the previous supercycle."
It cited the high technical barriers in the foundry industry and suppliers' limited capacity expansion as reasons memory chip prices are rising much faster than those of foundries.
TrendForce said, "While mature-node processes account for about 70–80% of total foundry capacity, advanced-node processes make up only 20–30%," adding, "Despite high prices, this means advanced processes contribute a relatively small share of total revenue, and because the foundry industry relies on contract-based business and long-term agreements, its price volatility is lower than the memory market."