The era of DDR5 is accelerating Samsung announces a $21.7 billion investment plan and is expected to start mass production in the second half of the year

The capital expenditure of large memory companies comes first, and the era of DDR5 is coming at a fast pace.

According to South Korean media ETNews, industry insiders revealed on Tuesday (26th) that the global memory chip giant Samsung Electronics plans to invest $21.7 billion and $9.97 billion respectively in memory and contract manufacturing businesses in 2021, with a total investment increase of 20% over last year. Among them, the investment in memory-related equipment has taken the lead.

The report specifically pointed out that Samsung Electronics signed a contract with DI on the 15th of this month to buy $31.3 million (34.5 billion won) worth of semiconductor testing equipment for DDR5, the standard product of the next generation DRAM memory. According to previous reports, Samsung Electronics is expected to start mass production of the DDR5 in the second half of this year.

Server demand drives up DDR sales DDR5 is just around the corner

The data show that DDR5 is the abbreviation of the new generation of memory interface chip, and the latter is the core logic device of server memory module. As a necessary channel for server CPU to access memory data, its main function is to improve the speed and stability of memory data access to meet the increasing high performance and large capacity requirements of server CPU for memory module.

Since last year, the demand for online office and distance education has broken out, and the demand for cloud computing has increased rapidly, driving the growth of server demand and directly promoting the demand for memory interface chips. According to IDC, China's x86 server market is expected to grow steadily at a compound annual growth rate of 9.08 per cent from 2020 to 2025, driving upstream memory interface chip sales to maintain growth.

The high market demand accelerates the iteration of DDR to a faster and more efficient new generation of products. Compared with the DDR4 products which are more widely used in the current market, DDR5 can support a minimum operating voltage of 1.1V and can achieve the operating speed of 4800MT/s.

On this basis, the dual-channel architecture design of DDR5 makes the power management transfer from the motherboard to the DIMM itself. DDR5 memory will have a 12v power management IC (PMIC) on memory that allows for better system power loading granularity. PMIC distributes 1.1V VDD power to help achieve signal integrity and noise, and better on-DIMM control of the power supply.

According to Jibang Consulting, DDR5 server memory products will be gradually released in 2022 and replace the current DDR4. According to Omdia, demand for DDR5 will begin to surge in 2021, accounting for 10 per cent of the global DRAM market by 2022 and 43 per cent by 2024.

In addition, DDR4 uses a maximum of "1x 9" memory chips, while DDR5 has a further increase in the demand for memory interfaces, up to "1x 10" (1RCD+10DB), and has higher data rates, lower energy consumption and higher density. The organization believes that with the gradual improvement of DDR5 penetration, shipments of memory interface chips are also expected to further increase.

The only target of A-share that the big factory is ready to share has occupied the technological highland.

In this context, major manufacturers around the world have laid out DDR5 and made great efforts to promote its commercialization. According to the official website and company announcement of the three major DRAM manufacturers, Samsung, Micron and SK Hynix have completed the research and development of DDR5 memory in 2020 and have large-scale mass production capacity:

SK Hynix released its first 2GB DDR5-6400 module in 2018 and announced the world's first DDR5 DRAM; in October last year. In January last year, Meguiar's DDR5 RDIMM based on 1znm process technology began to deliver samples with more than 85% better performance than DDR4, while Samsung announced in February last year that it had successfully developed a DDR5 chip.

In addition to speeding up the layout of DDR5 by big manufacturers, LPDDR5 has been used in high-end flagship machines, such as Hongmi K30 Pro5G, iQOO3, Yijia 8Pro, ZTE AXON 10s Pro and so on.

Although DDR5 has not yet been applied to the high-end PC market, there has been speculation that Intel is expected to release a new generation of CPU Alder Lake and AMD processors based on the next-generation Zen 4 architecture in the second half of this year.

It should be pointed out that memory interface chips need to be matched with various memory particles and memory modules produced by memory manufacturers, and pass all-round strict certification of server CPU, memory and OEM manufacturers for their functions and performance (such as stability, running speed and power consumption, etc.) in order to enter the large-scale commercial stage, so the industry barrier is higher.

At present, the manufacturers that can provide memory interface chips in the global market have evolved into three, namely Lan Qi Technology, IDT and Rambus. Among them, Lan Qi Technology, as the only target of A-share DDR, has steadily increased its market share by virtue of its high-speed and low-power technology with independent intellectual property rights, and has gradually established a leading position in the industry in the DDR4 stage.

At the same time, Lan Qi Technology also actively participated in the specification definition of DDR5 memory interface chip in JEDEC organization, successfully developed the engineering sample chip of the first generation DDR5 memory interface chip, and expanded the research and development of supporting chips needed for the layout of DDR5 server memory module, which is expected to continue to take the lead in the DDR5 "1x 10" generation.

According to its previous annual report in 2019, it plans to complete the research and development of the first generation DDR5 memory interface and its supporting chip mass production version chip and PCIe 4.0 Retimer mass production version chip in 2020.