Apple Expected To Consume 25% Of All DRAM In 2015, Impact Industry Trends

For years, RAM has followed a predictable pattern in the computing industry. New standards debut, with questionable performance gains and at significantly higher costs compared to previous products. As time passes, the new standard is adopted by more and more chipsets and vendors until it becomes dominant. Costs drop, volume rises, and everyone is happy. Now, however, Apple is expected to account for up to 25% of all DRAM sales next year -- more than any other vendor -- and that simple fact could have a significant impact on the adoption of next-generation standards.

Mobile Over Desktop

According to analysts, demand for Apple's iPhone 6, 6 Plus, and a rumored iPad Air with 2GB of RAM instead of the current 1GB will push Apple's share of the DRAM market from today's 16.5% all the way to 25%. At such capacity levels, Apple will look outside the traditional low power manufacturers to fill its needs, and the PC industry suppliers are reportedly responding by converting capacity from PC DRAM to LPDRAM. While the two standards are governed by a common set of rules, low power DRAM isn't just high-end PC DDR3 with good binning -- it's a distinct product with its own manufacturing and layout rules.

The potential short term effects on the mainstream PC market (including the laptop market) are twofold. First, DDR3 prices could edge up still more, driven by decreased supply. Ironically, an uptick in the PC market (or simply a smaller decline than was previously projected) would actually exacerbate this trend -- DRAM prices are notoriously fickle and more than a few manufacturers have gone from reporting comfortable profits to deep in the red within a single year. Because spinning up and shutting down foundry lines is a comprehensive and expensive process, it typically takes several quarters to fully align production with demand -- a fact that leaves companies exposed to dramatic shifts in market segmentation.

The other potential issue is that it could further slow the rollout of DDR4. Right now, DDR4 is only available on Intel's Haswell-E platform, but it's expected to roll out across the industry next year. Typically, new RAM standards scale upwards in performance fairly quickly, but don't fully match the?ir predecessors until more than a year has gone by -- by some metrics, DDR4 will need to hit 3.2GHz (up from 2667MHz currently) before it can match the latency of DDR3-1600. If mobile DRAM takes the rollout lead, we may see LPDDR4 pushing forward before mainstream DDR4 is really up to snuff -- which translates to a small performance hit for typical PC users.

Despite these shifts, Micron still expects the total memory market for DRAM to shrink, since most tablets still don't pull down the 2-4GB of RAM that PCs often include. Total NAND shipments are expected to rise in absolute terms through 2014 and 2015, with DRAM finally rising again after 2016. Whether that'll be a mixture of standard DDR4 and DDR3 or driven mostly by LPDDR will depend on how the market shifts between now and then.