Strategically sourcing memory ICs in the electronics supply chain can be a challenge. Here are some insights to help your organization navigate this complex environment. 

Demand for high-end smartphones is driving the growth of the global DRAM market. Before the COVID-19 pandemic, the global DRAM market was expected to see a compound annual growth rate of 28.7% from 2012 to 2023. 

Memory IC prices going up

Memory ICs have a wide range of applications and, as a result, make up a significant product category within the global IC market. As you may recall, DRAM revenue in 2017 and 2018 surpassed MPU sales for the first time since the 1990s. Although the DRAM market dramatically shifted in 2019, industry experts still predict global disruption and increased demand will push memory IC prices.

Global events create uncertainties in memory IC supply

In today’s globalized electronics supply chain, any incident in one part of the world could potentially have a profound impact on the steady supply of components. Natural disasters, epidemics, trade tensions, and unforeseeable events will put pressure on the electronics supply chain. Before the Covid-19 pandemic triggered massive supply chain disruption, the memory IC markets had already been put to the test in recent years:

  • The power outage at Toshiba’s Yokkaichi factory in June 2019 forced Western Digital to increase its flash product pricing 10-15%.
  • The 2018 trade tension between Japan and South Korea created raw material challenges for South Korea’s memory IC manufacturers, Samsung, and SK Hynix, which supplied 61% of worldwide memory chips.

Demand grows for memory ICs from end products

The development of 5G technology and increasing consumer demand for larger storage in electronic devices all contribute to a surge in demand for memory ICs globally. 

  • Smartphones: In 2021, the average smartphone is estimated to contain 4.8 GB of DRAM, with some flagship models carrying as much as 12GB DRAM. Additionally, an average 142GB of NAND flash is expected for popular smartphones.
  • Autonomous vehicles: As cars become smarter over time, they will need more sensors to collect data. As a result, DRAM and NAND flash demand for processing and storing data in vehicles will increase significantly. Take a look below: 

Level 1 and Level 2 Autonomous VehiclesLevel 3 Autonomous VehiclesLevel 5 Autonomous Vehicles
DRAM (per car)8GB16GB74GB
NAND flash (per car)8GB256GB1TB

(Source: Micron)

  • 5G and IoT: With the implementation of 5G technology, the amount of data that needs to be transmitted between devices will increase dramatically. 

How can you strategically source memory ICs?

To safeguard against unforeseen events and supply chain disruption, supply chain professionals need to proactively plan electronic component sourcing strategies. Keep the following in mind when it comes to strategically sourcing memory ICs: 

  • Develop a list of secondary suppliers for key components. This will help diversify sources and mitigate potential challenges when traditional brands are not readily available. 

Take Alliance Memory, for instance: This worldwide fabless manufacturer makes legacy and new technology memory products that are pin for pin drop-in replacements for SRAM, DRAM, and NOR FLASH ICs from Micron, Samsung, ISSI, Cypress, Nanya, Hynix and others. Some of their products provide alternatives to Micron’s MT41K512M16HA-125: A and MT41K512M16SN-125: A TR. Working with franchise distributors, such as A2 Global,  Alliance Memory will provide OEM and EMS companies with memory ICs that have shorter lead times, better price options, and assurance of supply. 

  • Establish relationships with supply chain service partners with global networks to enhance your sources when needed.

Global distributors of electronic components and supply chain service providers are uniquely positioned in the global supply chain. With dynamic access to global market information, worldwide support networks, industry experience, and vast resources, they can react fast in global emergencies to provide a steady supply of components. 

Let’s partner

Related posts: