Billings for semiconductor equipment from North America-based manufacturers rose 30% in January compared to a year ago, reaching more than $3 billion for the first time.
The president of trade group SEMI Ajit Manocha called the historic high “a great start to the year…The acceleration of digital transformation is fueling strong, durable demand for semiconductor equipment.”
In December, the North America-based semi equipment billings reached $2.7 billion, SEMI said on Monday.
The equipment growth is related to strong long-term demand for semiconductors, especially memory chips used increasingly in vehicle production.
Analyst firm TrendForce reported Tuesday that auto DRAM demand will see “explosive growth” in the next three years, rising by 30% annually.
DRAM in auto is needed to support assisted driving and autonomous vehicle technologies. TrendForce noted that Tesla adopted GDDR5 DRAM products for its Model S and X cars to match with its choice of Nvidia’s CPUs and GPUs. GDDR5 stands for Graphics Double Data Rate 5, a fifth generation of graphics random-access memory with a high bandwidth interface for high performance computing needs, which includes coming ADAS vehicles and beyond.
GDDR5 had the highest bandwidth at the time Tesla adopted the Nvidia processors. TrendForce said the DRAM content is at least 8 GB for all Tesla models, while Tesla’s Model 3 has 14 GB of DRAM and next-gen Tesla vehicles will have 20 GB. By comparison, a single Tesla vehicle far surpasses a PC or smartphone in DRAM consumption, TrendForce noted.
On average, TrendForce estimated the average DRAM content of cars will be about 4GB per car in 2021, much higher than in the past. In 2019, annual DRAM consumption globally showed that the auto memory segment was just 2% of the total, although that number is growing and is why TrendForce has such an ambitious growth forecast.
TrendForce said that DRAM suppliers must guarantee their auto memory chips have a product lifecycle that lasts 7 to 10 years and can stand a wider temperature range than PCs to ensure cars do not break down on the road. That means that auto DRAM chips are at least 30% higher than the prices of conventional DRAM and in some cases can be several times higher. Because of these high margins and the large potential auto market, DRAM suppliers are scrambling for a piece of the action, TrendForce said.
Currently, Micron has nearly half the auto memory products market with its comprehensive product line from DDR2 to DGGR6, according to TrendForce tabulations. And Micron also makes NAND Flash, NOR Flash and MCP, also used in the auto industry.
The other dominant manufacturers of DRAM are Samsung and SK Hynix. In contrast to TrendForce tabulations, analyst firm Statista said that Samsung has been the top global DRAM producer going back several years with 41% in Q3 2020, compared to 28% for SK Hynix and 25% for Micron.
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