Driven by such factors as the development of autonomous driving and the build-out of 5G infrastructure, the demand for automotive memories will undergo a rapid growth going forward, according to TrendForce’s latest investigations. The market experts forecast a CAGR of DRAM demand surpassing 30% over the next three years.
The market researchers cite electric car manufacturer Tesla as a leader in the application of electronics for autonomous vehicles. Tesla adopted GDDR5 DRAM products starting with the Model S and X because it also adopted Nvidia’s solutions for CPU and GPU. At the time, the GDDR5 series offered the highest bandwidth to work with these processors. Therefore, according to TrendForce, all of Tesla’s model series are equipped with at least 8 GB of RAM. The Model 3 even has 14 GB of DRAM equipped, and the next generation of Tesla vehicles will have 20 GB. If content per unit is used as a reference for comparison, Tesla far surpasses PC and smartphone manufacturers in DRAM consumption. TrendForce predicts that the average DRAM content of cars will continue to grow over the next three years, with a CAGR of more than 30% for this period.
Based on existing vehicle models circulating in the global car market, TrendForce estimates that the average DRAM content of cars will reach around 4 GB in 2021. The growth in the average DRAM content of cars is expected to be much higher this year than in the past few years. However, car sales are not as great in scale when compared with sales of consumer electronics such as laptop computers and smartphones. In 2019 the annual global car sales totaled around 94 million vehicle units. Also, cars have less DRAM content compared with servers. Looking at the 2019 data, the distribution of the annual global DRAM consumption shows that the automotive memory segment accounted for less than 2% of the total.
Nevertheless, the profit margins in the automotive market are higher, which makes this segment rather attractive to suppliers, despite high entry barriers. As the reason for these high barriers, TrendForce experts cite much higher durability and reliability requirements. The operating lifecycle of a car starts at 10 years, so DRAM suppliers basically have to guarantee that their automotive memory solutions have an adequate product lifecycle. Even as suppliers continuously migrate to the more advanced process technology, they have to ensure product longevity and long-term support for their automotive offerings.
Another issue, which is associated with durability, is operating temperature. Automotive DRAM products must have a much wider temperature range compared with other categories of DRAM products, in order to ensure the operation of the electronic vehicle systems even under extreme high and low temperatures.
For the automotive DRAM products that have met some of the most stringent standards set by the industry, their prices can even be several times higher than prices of conventional commercial DRAM products. In sum, although automotive DRAM products are more difficult and costly to manufacture than other kinds of DRAM products, their high profit margins and large potential market have been attracting DRAM suppliers to now scramble for a piece of the automotive memory segment.
Currently, Micron is regarded as the leader in automotive memory products with a market share of nearly 50%. The supplier first has the geographical advantage. Moreover, its collaborative relationships with tier-1 automotive suppliers based in Europe and the U.S. are longer in duration compared with its competitors. Micron also has a more comprehensive product lineup for automotive applications, ranging from traditional solutions (e.g., DDR2 to DDR4) to LPDDR and GDDR6 solutions. Additionally, Micron provides automakers with other types of memory technologies such as NAND Flash, NOR Flash, and MCP.
Apart from the three dominant DRAM manufacturers, Taiwan-based Nanya Tech and Winbond are continuing to release a wide variety of memory products in response to the growing demand of the automotive industry. In addition to possessing a comprehensive product mix ranging from traditional DDR solutions (up to DDR4) to low-power solutions such as LPSDR to LPDDR4X, Nanya Tech has also adopted the 20nm node for a significant portion of its manufacturing processes, which are relatively stable in terms of yield rate. On the whole, automotive applications account for nearly 15% of Nanya Tech’s specialty DRAM revenue, while specialty DRAMs account for more than 60% of the company’s total revenue.
Winbond, on the other hand, has been cultivating its presence in the automotive market for more than 10 years. Although the three dominant DRAM manufacturers are ahead of Winbond in terms of process technologies, Winbond’s extensive product portfolio, which includes specialty DRAM, mobile DRAM, NOR Flash, SLC NAND, and MCP, represents a competitive advantage over the vast majority of other manufacturers. Given that the automotive OEM market is both relatively stable and profitable, Winbond has been placing a long-term focus on this market; automotive applications now comprise more than 10% of the company’s total memory revenue, and Winbond’s automotive business will likely continue to expand going forward.
More information: https://www.trendforce.com/