Next-Generation Semiconductor Market Opens, DDR5 Commercialization Nears

[Asia Economy Reporter Changhwan Lee] With the international standard for next-generation DRAM established, Samsung Electronics and SK Hynix's DDR5 product mass production has come into view. It is expected that DDR5 produced by these companies will be equipped in major electronic products such as the latest smartphones, servers, and PCs as early as the second half of this year.

According to the semiconductor industry on the 20th, domestic semiconductor companies including Samsung Electronics and SK Hynix are preparing for mass production of DDR5 DRAM. They are reportedly discussing product supply with major overseas clients.

DDR5 is a next-generation DRAM with significantly improved speed and capacity compared to the currently internationally used DDR4. The data transfer speed is 6400Mbps, twice as fast as DDR4's 3200Mbps. Initial products are expected to be 4800Mbps, and if yield stabilizes, speeds up to 8400Mbps are also possible. Power consumption is 1.1V, about 9% less than DDR4's 1.2V. The maximum capacity is 64Gb, four times that of DDR4's 16Gb.

Samsung Electronics and SK Hynix have already completed product development, and with the international standard now finalized, they can proceed with full-scale mass production preparations. The JEDEC Solid State Technology Association announced the standard specifications for DDR5 on the 14th. JEDEC is a private organization that sets global semiconductor standards, with major semiconductor companies such as Samsung Electronics, Intel, and Micron participating.

The industry expects semiconductor supply to major clients to begin from the second half of this year, starting with smartphones. In particular, demand for DDR5 is analyzed to be high in the server market. Servers require high-performance DRAM due to the nature of operating large-capacity semiconductors 24 hours a day.

Especially, expectations are growing that Intel, the largest client, will support DDR5 in its new platform next year. Market research firm IDC predicted that DDR5 demand will start in earnest this year, accounting for 25% of the total DRAM market next year and 44% in 2022.

Choi Doyeon, a researcher at Shinhan Financial Investment, explained, "DDR5 features faster speed, lower power consumption, and improved performance compared to DDR4," adding, "Adoption of DDR5 will be a very attractive choice for server companies that require high-performance and high-efficiency semiconductors."

DDR5 is expected to be priced more than 50% higher than existing products, which is also anticipated to greatly help improve the performance of our companies. DDR4 also formed a price premium of over 50% compared to DDR3 in the early market stage in 2015.

Additionally, DDR5 is expected to have a chip size 10-15% larger than DDR4. A larger size can be interpreted as a reduction in supply, raising the possibility of tighter supply. This is another factor for product price increases. Accordingly, not only Samsung Electronics and SK Hynix but also related partners are expecting performance improvements.