Market Trends of China Dynamic Random Access Memory (DRAM) Industry
Growing Investment in Data Centers to Drive the Growth
- China is a large country both in terms of geography and population. According to estimates by the International Monetary Fund (IMF), the population of China is expected to reach about 1,411.96 million in 2023. A large portion of this population is digitally educated and uses digital services in some form or other. Internet penetration plays a major role in this trend. For instance, according to CNNIC, in 2022, the internet penetration rate was about 75.6% in China.
- Owing to such trends, internet-based services and businesses are flourishing in the country. For instance, the e-commerce industry in the country has expanded significantly in recent years. According to the data provided by the Ministry of Commerce in 2022, the overall domestic e-commerce sales in China reached CNY 13.79 trillion (~USD 2.04 trillion), up by 4% from the previous year.
- The growing number of internet users and the recent shift in trend wherein businesses across the country are increasing their adoption of digital solutions have significantly increased the amount of data generated, thus driving the demand for storage spaces and investment in data centers.
- According to Cloudscene, China was ranked fourth in terms of the number of data centers in the country, as it had about 443 data centers in 2022. This number is expected to grow as several public and private organizations increase their data center investments. For instance, in February 2023, CapitaLand launched a new China-focused data center development fund. The organization also unveiled its plans for two new facilities outside Beijing.
- Government initiatives are also playing a crucial role in the growth of the data center industry in the country. For instance, the Chinese government recently launched a new national project to build a centralized data center system across eight regions. The project aims to channel the country's growing demand for computing and data analysis.
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Demand Across Automotive Segment to Grow Significantly
- China is among the largest automotive markets in terms of production and consumption. Owing to favorable government regulations and the availability of a low-cost skilled workforce, almost all global automobile companies have their manufacturing bases in the country. For instance, according to the China Association of Automobile Manufacturers (CAAM), in April 2022, about 210 thousand units of commercial and 996 thousand passenger cars were manufactured in the country.
- Owing to the presence of a large consumer base, the country is also among the major consumers of automobiles. This is evident because, in April 2022, about 965 thousand passenger and 216 thousand commercial vehicles were sold in the country. (Source: CAAM).
- In recent years, the applications of ICT technologies in automobiles have gradually shifted from the entertainment audio and video playback and navigation system to in-depth learning and vehicle-to-everything (V2X) communication to achieve the eventual goal of autonomous vehicles. To achieve this goal, semiconductors and memory devices will play a crucial role.
- DRAM is one such component enabling these advancements in the automobile industry. For instance, it is widely used in high-definition displays and displays like heads-up displays and instrumentation consoles that provide safety-critical information to the driver. Additionally, the automotive sensors and cameras that provide critical input to the ADAS system generate a large amount of data, hence, requiring the bandwidth and capacity of DRAM.
