The memory market is feeling the effects of a fall in PC shipments with the subsequent stabilization of DRAM prices, which industry observers say will delay the wide adoption of the upcoming DRAM called DDR4.
The latest PCs and servers come with DDR3 SDRAM, and mobile devices have just started getting a type of low-power memory called LPDDR3 (low-power DDR3). DDR4 is the successor to DDR3, and consumes 20 percent to 40 percent less power while offering double the throughput of its predecessor.
But with memory prices stabilizing after years of double-digit drops, analysts said that DDR3 DRAM will likely have a longer-than-expected life, which could delay the wide adoption of DDR4 in computers. DRAM prices have stabilized as demand for DDR3 has exceeded supply, and the number of memory makers has also dwindled. Samsung, SK Hynix, and Micron dominate the DRAM market, while other memory makers have either been acquired or are focusing on the more profitable NAND flash business.
The volume shipments of PCs and servers are not enough to justify an early switch to DDR4, analysts said. Also, a lot of focus is now on the fast-growing tablet and smartphone markets, so manufacturers are shifting capacity to LPDDR3 and other forms of mobile memory and storage.
"DDR4 hasn't been a desire. It's not something customers have been clamoring for," said Mike Howard, senior principal analyst of DRAM and memory at IHS iSuppli.
The final specification for the DDR4 standard was published by JEDEC Solid State Technology Association in September 2012. In addition to power-saving and performance improvements, DDR4 is a highly reliable form of DRAM with more debugging and diagnostic tools to prevent errors, said Scott Schaefer, a representative for JEDEC.
A broad spectrum of DRAM suppliers, system manufacturers, third-party contractors and test equipment companies are involved in the development and testing of DDR4, Schaefer said. He could not speak to when DDR4 would reach the market, saying it was up to JEDEC member companies to announce products.
But analysts said that DDR4 will likely take on volume shipments starting in 2015 or 2016, starting in servers followed by client devices like PCs.
Research firm IC Insights is predicting DDR4 sales volumes to overtake DDR3 in 2016 at the earliest. By the end of this year, the research firm is projecting DDR3 to account for 86 percent of DRAM market share, followed by DDR2 at 8 percen,t and DDR at 2 percent, with other forms of memory such as PC-133 graphics DRAM and a very small amount of DDR4 accounting for the remaining 4 percent.
Nobody wants to pay a premium for DDR4 products and manufacturers don't want to make the memory if they are not going to get a premium, iSuppli's Howard said.
"It's a chicken-and-egg situation." Howard said.
A bad memory market would have served to accelerate the adoption of DDR4 as manufacturers want higher margins, Howard said. However, with the DRAM market stabilizing, manufacturers could stick with DDR3 longer before shifting capacity and taking on the expense to make DDR4 DRAM.
No move to DDR4?
There is a motivation to switch quickly to DDR4, as it could generate healthy profit margins, but manufacturers also rely on chipmakers like Intel and Advanced Micro Devices to support memory at the chipset level, said Brian Matas, research vice president for IC Insights.
Upcoming chips for PCs and servers from Intel and Advanced Micro Devices support only DDR3 memory, and the companies did not share any further information about DDR4 support. AMD is working closely with memory partners to support memory transitions and expects to see the benefits of DDR4 in its graphics products, a spokesman said.
"Motherboards and chipsets that support DDR4 are not expected to show up in the marketplace until late 2013 or early 2014, which does not bode well for rapid adoption of DDR4," Matas said.
Test samples for DDR4 memory first appeared in 2011 from companies like Micron and Samsung even before the specification was finalized. DRAM makers have been hanging in the balance since and are now prodding Intel and other integrated-circuit suppliers to bring chipset support for DDR4 quickly.
The DDR4 market could aggressively grow if and when the PC market picks up again, which could be any time from later this year to 2016, Matas said.
"That's a big 'if' because tablet and smartphone unit shipments continue to grow aggressively, usually at the expense of standard PC shipments," Matas said.
JEDEC is also developing a new LPDDR4 specification for tablets and smartphones and it will be many years before DRAM is used in mobile devices. Device makers still largely use LPDDR2, and are switching over to LPDDR3 memory. Some DRAM momentum will move in the direction of LPDDR3, analysts said.
There are also opportunities being explored to make DRAM for computers faster and more relevant. Manufacturers are backing technologies like Hybrid Memory Cube, which involves 3D stacking of DRAM and placing the memory closer to the CPU. Starting with DDR3, HMC arrays will support multiple forms of memory including DDR4 and will provide faster bandwidth than traditional DRAM via an interconnect that cuts through the memory layers. HMC is backed by the Hybrid Memory Cube Consortium, but other technologies being investigated by JEDEC include High-Bandwidth Memory and Wide-I/O, which have not attracted as much attention.
But for now, JEDEC remains focused on transitioning to DDR4, iSuppli's Howard said.
DRAM could have reached its ceiling with DDR4 and there is a possibility that a new form of memory will replace DRAM after DDR4, Howard said. Also, there are challenges in scaling down DRAM as manufacturing technologies improve.
"DDR5 is highly unlikely," Howard said.