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DRAM to remain largest IC segment in 2020, says IC Insights

DRAM will generate the greatest sales revenue among all IC product categories in 2020, while NAND flash will outperform other sectors in terms of revenue growth, according to IC Insights.

The top-five IC product categories, in terms of revenue, this year will have ties to computing or communication applications, said IC Insights. With estimated sales of US$65.2 billion, DRAM will top the list followed by NAND flash with US$55.1 billion. Computer and cellphone processors also make the list along with the computing special-purpose logic segment.

DRAM has been the largest revenue-generating IC segment since 2017, even through the steep memory market downturn in 2019, IC Insights indicated. DRAM is forecast to retain its place as the largest IC market in 2021.

In terms of revenue growth, NAND flash is expected to top the list with a sales surge of 25% this year, IC Insights said. NAND flash sales were exceptionally strong in the first quarter as strong demand from makers of data center servers led to a steep increase in the average selling price. Prices for NAND flash continued to rise through the remainder of the year, but at a much more modest pace, resulting in a solid 25% increase in sales for this segment.

Computer CPUs are expected to place third in terms of revenue in 2020, IC Insights said. The COVID-19 pandemic led to upgrades in computing systems as consumers and businesses transitioned to home-based online activities. In addition, an increase in shipments of data center servers to process and store all this information also helped sales in the segment. Sales of higher-priced 5G processors in the second half of 2020 have been key to the rise in cellphone application MPU sales this year.

The advent of 5G processors that power new smartphones is expected to boost cellphone application MPU sales 24% this year, IC Insights said. Most 5G processors are based on 5nm process technology. Faster and more technology-rich 5G smartphones also helped provide a strong increase to sales in other communications-related IC product segments.

The IC industry has been one of the most resilient markets during this corona-virus plagued year. Although causing a deep global recession in 2020, the COVID-19 pandemic spurred an acceleration of the global digital transformation resulting in 21 of 33 IC product categories that survived (and even thrived) with positive growth. With the promise of a vaccine being developed and administered worldwide next year, a strong global GDP rebound and double-digit IC market increase are forecast for 2021, according to IC Insights.