Sticky situation: Why is DDR4 uptake slow and what's next for the RAM market?

PCR explores the state of the memory sector
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Despite having been on sale for almost a year, DDR4 sticks of memory only make up around six per cent of the consumer RAM market. Will DDR4 have a bigger impact this year? We ask the experts…

DDR4 RAM may be superior to DDR3, but it’s fair to say it hasn’t yet set the world alight in terms of adoption.

While replacing RAM was generally considered the cheapest and quickest way to upgrade a user’s PC in the past, the rise of the SSD and more affordable graphics cards have seen it take a bit of a backseat in recent years in favour of flashier, affordable and impressive upgrades.

DDR4 RAM, usually available in kits of four or eight, launched mid-2014 as the fastest and most efficient type of memory available, but right now it’s still a little pricey (anything from about £100 at the low end to £500-plus at the higher bracket) – and is compatible with Intel’s Haswell-E CPU/X99 motherboards.

This means uptake has been slow but steady. DDR4 RAM reached its highest ever share of the UK RAM market in February 2015, capturing six per cent of the market volume, which accounts for 15 per cent of the market value, according to GfK data.

Globally, the memory market is booming overall. It grew 16.6 per cent last year, reports Gartner, and it was the best performer in the semiconductor sector for the second year in a row.

So while the DRAM market is strong overall, it appears many consumers are still buying DDR3 rather than future proofing their machines and opting for DDR4; there is clearly room for growth.

In terms of pricing, in February just over one third of all RAM modules sold in the UK were priced less than £30. In contrast, 61 per cent of DDR4 was sold over £100. Looking at capacity, 4GB RAM is still the most popular segment, compared to 32GB for DDR RAM, which GfK says reflects the specialised/early adopter demographic who are upgrading to DDR4.

Dominic Ashford and Andrew Walsh from analyst GfK say in a statement: “From a hardware perspective, higher spec RAM continues to grow, with 8GB up to 30 per cent share of PC hardware in February 2015, compared to 23 per cent the same time last year. This evolution from 4GB occurs little and often month by month, with 4GB down to 50 per cent volume share compared to 60 per cent in February 2014.”

The real kicker is that UK B2B channels account for a whopping 94 per cent of DDR4 sales in terms of volume (as of February); the server and enterprise market is clearly benefitting from the cost savings that DDR4 offers.

“When you roll out these benefits of low power consumption on DDR4 RAM in high density server requirements, along with the benefits of power consumption and speed enhancement, plus the benefits of Flash SSD/PCIe Server applications, we see this as offering businesses and consumers huge benefits and savings when you are looking at larger data centre and cloud storage environments,” explains Ged Mitchell, MD at distributor M2m Limited.

A spokesperson for Samsung Semiconductor Europe adds: “Today, we see already an accelerating adoption trend of DDR4 for server applications and LPDDR4 for mobile applications. In Q1 2015, the adoption rate is slightly under 50 per cent and by the end of 2015, the majority of servers will be using DDR4. As is typical the ‘adder’ cost of DDR4 relative to DDR3 will reduce and drive the adoption rate.”

So when do RAM vendors like Samsung expect to see mainstream consumer adoption of DDR4?

“For PC, the transition to new technology typically takes place one year after server and end of 2016, 2017 will see a significant adoption of DDR4/LPDDR4. By 2017 in the EDP area, we expect that DDR3 adoption will become niche,” adds Samsung.

Mike Buchanan, Corsair’s senior manager for the UK and Benelux countries, comments: “Enthusiast users have adopted the X99 platform quickly last year and it is now gaining for mainstream customer as well. Along with that, DDR4 adoption is rising. The catalyst for DDR4 to become mainstream will be once it is implemented in the volume products – we expect that to happen starting Q4 this year.”

M2m’s Mitchell believes DDR4, like other memory technology generations, will normally take up to six to 12 months to ramp up with a typical price premium (typically 25 to 30 per cent) for initial volumes, until the manufacturers get to a yield output volume that allows them to reach parity with older generations, in this case DDR3.

“The interesting trend we’re seeing with DDR4 is the much faster uptake on server products and data centre applications, and on the PC side the main early adopters are the gaming memory community,” he tells PCR.

“The costs involved in moving to the next technology or process generation are staggering and can run into billions of US dollars. By definition this restricts the number of manufacturers who can actually produce DRAM in the market and the number of volume DRAM and Flash players has gone from around 15 as of seven or eight years ago, to only four now: Samsung, [Crucial parent company] Micron, SK-Hynix and Toshiba. At M2M we work with the top three.”

Late last year Crucial told PCR that sales of its DDR4 DRAM modules were steady, but admitted there was “apprehension” towards pricing and adoption.

Crucial product marketing manager Jeremy Mortenson believes that DDR4 could really take off during this year and next.

“The analysts are saying late 2015/early 2016 for a possible crossover,” he comments. “We expect additional platforms to be released in 2015 and going forward. It really depends on Intel and AMD along with the motherboard and OEMs on how soon modules cross over to DDR4. We’re ready.”

So how much does analyst GfK anticipate DDR4’s share of the market will grow in the future?

Walsh adds: “We would expect to see steady growth. The fact that it has taken seven months to get to a six per cent share indicates that it will continue to be slow, yet consistent share growth throughout 2015.”

PORTABLE POWER

On the mobile devices side, with smartphones still as popular as ever and tablets still going strong (despite a slower uptake towards the end of 2014 and this year), Corsair says that memory for these devices is now taking a large share of DRAM output.

Buchanan comments: “This leads to product being optimised with new priorities, chiefly power efficiency and integration to keep packages small. For PC, current platforms are able to take advantage of higher frequencies, and the market is responding to that in moving to 1,866MHz and up for desktop memory.”

Samsung adds: “Many notebooks are focusing on longer battery power in order to compete with the longer battery life coming from tablets, and as such are also turning to mobile technology.

“Several notebook products on the market use LPDDR3, and Samsung believe in the future a larger portion of notebooks will turn to mobile memory and especially LPDDR4.”

Looking back on the desktop side, technology for DRAM is improving all the time. Memory vendor Avexir launched the first LED-based DDR4 RAM earlier this year, which features a red strobe LED effect targeting gamers. Elsewhere, Samsung announced its mass production of 8GB DDR4 based on 20nm process technology in October last year, which allows a maximum capacity of 128GB by applying 3D TSV technology while it’s using 1.2 volt, which is currently the lowest possible voltage.

Using this new 8GB DDR4 chip, Samsung says its 32GB RDIMM module can deliver a performance increase of approximately 29 per cent with a data transfer rate of 2,400Mbps, compared to 1,866 Mbps from a DDR3 server module.

Elsewhere in the market, Crucial’s parent company Micron saw its revenues for Q2 2015 dip nine per cent compared to Q1 2015, which it says was primarily due to declines in DRAM unit volumes and to decreases in average selling prices.

Check out the latest RAM products in our sector guide.

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