Mobile DRAM market dynamics in the evolving mobile ecosystem

Mobile DRAM market dynamics Mobile DRAM market dynamics in the evolving mobile ecosystemin the evolving mobile ecosystemin the evolving mobile ecosystemin the evolving mobile ecosystem

Mobile Forum 2014 Copyright © 2014 SK hynix

Personal IT devices trendPersonal IT devices trend

ContextualDevices

1st Diversified Era

2nd Diversified Era

Human-like

Personal Computer

Convergence

Devices

DigitalDevices

IT users’ needs trendIT users’ needs trend

More intuitive User-centricAlways connected

New Technology Contents / ServicesConvergence

50TRILLIONGigabytes of Data

50TRILLIONGigabytes of Data

2TRILLION

Financial Transactions

2TRILLION

Financial Transactions

31BILLION

Connected Devices

31BILLION

Connected Devices

4BILLION

Connected People

4BILLION

Connected People

by 2020

Source : IDC, Intel

Changes in mobile ecosystemChanges in mobile ecosystem

Platform

Integrated

Valu

e Chai

n

ContentsContents creation

Platform

Emergence of a Variety of Business Models Telephone Age IP Age

Value ChainReorganization

Contents Network

Terminal

Integratedservices

by a single

independentcompany

Ver

tica

lVa

lue

Chai

n

PlatformAuthorization

NetworkTelecom services

TerminalHandset sales

St. Peter’s Square in 2005 and 2013

Source : NBC news

Mobile devices marketMobile devices market

1,500

2,000

2,500

Mobile Devices Shipment (M)

Smartphone 1,187M

Sales

PLC of Mobile Devices

CAGR

40%

0

500

1,000

2009 2010 2011 2012 2013 2014 2015

Smartphone 1,187M

Tablet 291M

Source : SK hynix marketing

* Including Chinese Local brand Tablet (White-Box) Shipment

Feature phone

TimeGrowth Maturity DeclineIntroduction

82%

-9%

Evolution of mobile phone functionsEvolution of mobile phone functions

In built projector Augmented reality

1980s

1990s

2000s

2010s Sensors

3D screen

Hologram

Smartphone Display Resolution

DVGA/DVGA+

HVGA/HVGA+

XGA/XGA

2014 1H : WQHD phone launched2015 : UHD phone launch expected

Smartphone Application Processor

Hardware advances in Hardware advances in smartphonesmartphone

2013 2014~2015

PremiumLTE

2012 2013 2014 2015

XGA/XGA

VGA2

UHD

WQHD

FHD

gHD

WVGA/FWVGA

720HD

nHD

Source : SK hynix PPNE/Display Search

Mid to High

Mid to low

Entry

LTE64bit

Octa/Quad core

LTE32bitQuad core

3G32bitDual core

Memory requirementsMemory requirements

32bit 64bit

General App.OS+native AppHardware

300MB up typically

500MB up typically

Mem

ory

Den

sity

Mem

ory

Den

sity

64bit

11 11

14

Smartphone Gb/box

Tablet Gb/box

Memory Contents (Gb/box)

Smartphone

30%Tablet

CAGR

FHD WQHD UHD

Video/Display

FHD WQHD UHD

Display/Encoding

500MB

7GB/s

14GB/s

20GB/s

Mem

ory

Den

sity

Mem

ory

Ban

dw

idth

Hig

her

Res

olu

tion

4

9

5

2011 2012 2013 2014 2015

Source : SK hynix PPNE & marketingSource : SK hynix PPNE

Tablet

29%

Notebook

10%

High-end/Premium (>$300)

Smartphone Shipment by Segment

8%

10%

16%

24%

25%

28%

North America

Western Europe

Central & Eastern Europe

Africa Middle East

Central & Latin America

Asia Pacific

Smartphone Shipment CAGR 2011~2017

Growth in emerging marketsGrowth in emerging markets

2011 2012 2013 2014 2015

Mid-end ($100~300)

Entry (<$100)

70%70%70%70%

Source : SK hynix marketingSource : SA

20%20%

27%27%

28%28%

45%45%

Russia

Brazil

China

India

% of Sub-$100 Smartphone in BRICs (Year 2014)

Smartphone Price (US$)

250

300

350

Rise of lowRise of low--priced priced smartphonesmartphone

Discrete CAGR

-13%

Baseband Processor by Integration

100

150

200

250

2012 2013 2014 2015 2016 2017

CAGR

-6%

Source : SA

25%36%

47%56%

63%68%

2012 2013 2014 2015 2016 2017

Source : Gartner

Integrated CAGR

26%

Wearable devicesWearable devices

9%

17%

19%

22%

Connected TV

Mobile wallet

Everything as a service

What is the next big thing in mobile?

Wearables

Tech. executives think it’s the next big thing

6%

2%

4%

7%

7%

7%

Others

Indoor location

Distance learning

Mobile advertising

Mobile health

Connected car

Source : Open Mobile Media

(Top-level mobile executives attending the Open Mobile Summit)

Wearable devices marketWearable devices market

Per

form

ance

Feature-rich Smart Watchw/ Mid/Low Density mDRAM/Flash

Smart Glassw/ High Density mDRAM/Flash

Hardware Landscape of Wearable Devices

218 260%

CAGR

Wearable Devices Market (M)

Power

Basic Smart Watchw/ Less or Small Density of mDRAM/Flash

w/ Mid/Low Density mDRAM/Flash

Small form factor isthe common requirement

for wearable devices

15

55

65%60%

49%

2013 2014 2015 2016 2017

Others

Smart glasses

Smart watch

Wrist band

YoY

CAGR 95%

Source : SK hynix PPNE & marketingOthers : The other form of devices like necklaces and clips

Good for PCB area saving!

Form Factor Restriction Memory Package Option

<eMMC-POP>

DRAMeMMC

PCB

Mobile AP

Memory solutions for wearable devicesMemory solutions for wearable devices

eMMC-PoP

eMMC-PoP

<eMMC MCP>

Mobile AP DRAMeMMC

PCBPCB

<KGD>

eMMC or micro SD

PCB

Mobile APDRAM

PCB

Much flexibility on memory configurations

PCB space saving with DRAM SiP

and flexible storage with external storage

Source : SK hynix PPNE

DRAM Market Overview

74%

48%

61%

75%

33%29%

30

35

40

45

50

Three Key factors

Changes in DRAM marketChanges in DRAM market

3 major vendors

-38%

-29%

-61%

-23% -25%

-

5

10

15

20

25

'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14

DRAM Revenue ($B)

YoY

Source : WSTS, IDC

1. Conservative capital investment2. Delay of Tech. migration 3. Capacity mix change to mobile DRAM

67%

91%

48%

Conservative Conservative capExcapEx

DRAM industry CapEx/ Revenue trend ($B)

26%20% 19% 19%

48%

27% 28%24%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

DRAM bit growth

Source : iSuppli

CapEx/revenue

40%

50%

60%

70%

DRAM tech migration by generations (wafer output portion)

0%

20%

40%

60%

Net die increase (%)

Tech. migration hurdleTech. migration hurdle

0%

10%

20%

30%

40%

1Q 2Q 3Q 4Q 5Q 6Q 7Q 8Q 9Q 10Q

4xnm

3xnm

2ynm

4xnm

3xnm

2ynm

Source : Company Data, BNP Paribas estimates

4x 3x 2x 2y 2z

4x 3x 2x 2y 2z

Process steps

Source : SK hynix marketing

PC

27%Consumer & Graphics

Consumer & Graphics

PC

20%Mobile2017

Consumer & Graphics

Shift from PC to mobile DRAMShift from PC to mobile DRAM

DRAM demand by application

Source : SK hynix marketing

PC

57%Mobile

15%

Server

14%

27%

Mobile

35%

Server

25%

2011 2014& Graphics

20%Mobile

40%

Server

27%

2017

SpecialtySpecialty

CommodityCommodityPerformance

Memory paradigm shiftMemory paradigm shift

Cost Down

Value Up

CommodityCommodityPerformance

Quality

Customization

Mobile DRAM life cycle trendMobile DRAM life cycle trend

LPDDR1

LPDDR2

LPDDR2

LPDDR3

1Q10 3Q 1Q11 3Q 1Q12 3Q 1Q13 3Q 1Q14 3Q 1Q15 3Q 1Q16 3Q 1Q17 3Q

LPDDR2

LPDDR3

LPDDR4

WIO2

LPDDR1

Mobile DRAM Demand (B/1Gb EQ) Mobile DRAM Mode Transition (1Gb EQ)

27

31

CAGR

46%

Mobile DRAM demand forecastMobile DRAM demand forecast

LPDDR4

WIO2

LPDDR2

3 6

11

16

21

27

2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017Source : SK hynix marketing

LPDDR1

LPDDR2

LPDDR3

Demand

Better Performance

Lower Power Consumption

More Cost Effective

Smaller form factor

Mobile memory solution in the futureMobile memory solution in the future

Supply

Lower Power Consumption Smaller form factor

Conservative CapEx Technology Hurdle

Optimal Solutionfor each segment

Thank you