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50MP Image Sensors to Retain Growth Momentum in 2022

Beijing, Boston, San Diego, Buenos Aires, London, New Delhi, Hong Kong, Seoul – April 6, 2022

Huawei’s P40 series was the first to use 50MP image sensors in premium smartphone design in March 2020. Other OEMs, including vivo and OPPO, quickly caught up and launched premium phones featuring 50MP sensors. By the second half of 2021, when Samsung’s 0.64µm 50MP S5KJN1 entered mass production, 50MP sensors had become a hot item. The sales share of smartphones featuring a 50MP rear primary camera jumped to 5.6% in Q4 2021 from 1.7% in Q2 2021.

Smartphone 50MP Rear Primary Camera Penetration by Sales

Now, large-pixel 50MP (1.0µm and above) sensors have started to penetrate the mid-to-high-end market due to price cuts. In February 2020, Sony released its custom 50MP IMX700 for Huawei, after which Samsung and OmniVision also launched their 50MP sensors. This led the price of large-pixel 50MP sensors to record a high double-digit drop compared to Q2 2020. As a result, more and more mid-range models, such as the realme GT Master Explorer Edition, started adopting big-pixel 50MP sensors, pushing up the share of 50MP in the $400-$599 segment to 11.7% in Q4 2021 from 4.2% in Q2 2021.

Smartphone 50MP Rear Primary Camera Penetration by Price Band, Q4 2021

Samsung unveiled its small-pixel 50MP S5KJN1 (0.64µm) in June 2021, further bringing the price down to under $5. This convinced OEMs such as vivo, OPPO and Xiaomi to actively deploy the S5KJN1 in their low-to-mid-end models. As a result, the proportion of smartphones with a 50MP rear main camera in the $200-$399 and < $200 segments surged to 3.6% and 6.1% respectively in Q4 2021.

Additionally, there is an emerging trend of OEMs strengthening the ultrawide camera performance by increasing the resolution to 50MP to deliver superior landscape shooting.

Looking into 2022, SK hynix and SmartSens are expected to start mass production of their 50MP image sensors during the year, which will intensify competition and bring prices down. Therefore, we expect stronger demand for 50MP image sensors, with sub-0.7µm offerings accounting for more than three-quarters of total sales.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Alicia Gong

Ethan Qi

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Infographic: Q4 2021 | Semiconductors

Semiconductor Top 7 by revenues, Q4 2021:

Samsung took the lead in 2021 with a strong DRAM and NAND flash market performance at the expense of Intel’s relatively flattish results. Major smartphone SoC and GPU vendors also enjoyed strong growth in the year with over 50% YoY revenue increase. In addition, we saw 27% YoY revenue growth among the top 15 vendors, outperforming global semiconductor revenue growth and implying another year of centralized semiconductor industry.

Foundry Industry Share by revenues, Q4 2021

TSMC reported stronger than expected Q4 2021 revenue driven by major smartphone (Apple) and HPC (AMD) clients and secured 56% of global foundry market share. SMIC also delivered higher sales growth from increasing wafer price and local client demand. In 2021, worldwide foundry revenue reached USD100 billion milestone with 27% year-over-year growth from 2020.

Smartphone AP Market Share by shipments, Q4 2021

MediaTek led the smartphone SoC market with a share of 33%. Its smartphone SoC volumes declined this quarter due to the high shipments in the first half and inventory corrections from Chinese smartphone OEMs. Qualcomm recorded a very strong quarter, growing 18% QoQ and 33% YoY. Qualcomm was able to prioritize high-end Snapdragon sales, which come with higher profitability and less impact from shortages than mid-end and low-end mobile handsets.

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Samsung Takes Semiconductor Crown From Intel in 2021

London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – January 28, 2022

Semiconductor industry went through significant structural changes in 2021 after entity lists were announced by both China and the US. The overall 2021 semiconductor revenue rankings also varied from the previous year. Samsung took the first position from Intel thanks to its solid growth momentum in both logic IC and memory segments. Memory vendors continued to lead the industry with SK Hynix and Micron taking the third and fourth positions, followed by IC design vendors, including Qualcomm and NVIDIA.

During 2021, many top-tier semiconductor companies reiterated material changes happening in the industry, such as semi content growth, higher inventory level and longer chip lead time due to global component shortages as well as logistical issues. The year saw 19% YoY revenue growth with the largest contribution coming from the memory and IC design sectors.

Semiconductor Industry Top Players Revenues & Rankings – 2021

In general, we believe supply constraints will likely persist before H2 2022, though our checks suggest some amount of component shortage easing. Looking ahead, foundries are adding new capacities in 2023 and most of them hold optimistic views on their partnerships and utilization rates even if supply and demand normalize in the foreseeable future. High performance computing, metaverse (AR/VR/XR), 5G and automotive remain key semi content growth drivers for the industry.

Disclaimer: This ranking consists of chip companies. Foundry revenue is not included to avoid double counting.

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Analyst Contact:

William Li

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Mobile Demand Raises DRAM Revenue by 30% YoY to $19 bn in Q1 2021

London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – Jun 25, 2021

Global DRAM revenues rose to $19 billion in Q1 2021, increasing by a solid 30% YoY and 9% QoQ. Distance education and work from home (WFH) continued propelling a substantial demand for smartphone and laptop DRAM, resulting in a 6% growth in bit shipment and a 3% rise in ASP over the previous quarter.

Associate Director Brady Wang said the Chinese handset makers stepped up their smartphone shipments in the first quarter, intending to gain shares from the beleaguered Huawei. In addition, the high-density LPDDR4x memory prices softened in H2 2020, increasing smartphone DRAM content and making 6GB the minimum standard for mid- to high-end smartphones since 2021. As a result, the average DRAM capacity in smartphones clocked at 5.3GB in Q1 2021, rising impressively by around 21% YoY and 7% QoQ. Similarly, servers experienced recovery in demand, and the adoption of a new data-center CPU bumped up server content per box. Therefore, the server segment’s DRAM demand rose as well.

According to Wang, DRAM is already an oligopolistic market with an Herfindahl-Hirschman Index (HHI) of 3,138. A significant capacity expansion by any player will soon turn around market status and reduce the overall profitability. Therefore, this year, all three major players will spend most of their resources in migrating to advanced nodes, a process that is bound to reduce production capacity. In addition, transportation and component shortage concerns will force device vendors to place orders earlier than usual. When coupled with the growing demand for personal computers, games and servers, these factors signal the possibility of the DRAM market turning to a shortage this year. The smartphone market is recovering at present, but its cost sensitivity means that a DRAM price spike may put the brakes on smartphone DRAM content growth.

Competitive Landscape

The DRAM industry is dominated by three major players that collectively account for about 95% of the market’s bit shipments and revenue.

Samsung Electronics

With $7.9 billion in revenue, Samsung led the DRAM market in Q1 2021. The South Korean semiconductor giant continued commanding over two-fifths of the DRAM market revenue, overshadowing its nearest competitor by over 41%. Samsung’s DRAM bit shipment growth came from actively responding to the (i) 5G-related surge in smartphone demand, (ii) rising server demands for data centers and (iii) rise of home entertainment culture that increased memory content in TVs and STBs to support 4K UHD content and streaming.

Research Associate Siddharth Bhatla sees 1Z nm or 15 nm as Samsung’s most advanced mass-produced DRAM node from the technology perspective. The company’s plans include beginning mass production of 14 nm node in H2 2021. Samsung aims to differentiate its DRAM offerings using multi-layer EUV on its 14 nm node, building upon the single-layer EUV in its current 15 nm node.

SK hynix

Ranking second, SK hynix accounted for over 29% of the DRAM industry’s Q1 2021 revenues. Surpassing Micron by over 25%, its revenues rose by over 28% YoY in that period, in line with the industry’s overall growth. In addition, the company’s bit shipments rose 4% QoQ, thanks to its ability to actively cater to the surging demand for mobile and PC memory. By the year-end, SK hynix aims to (i) ramp up the production of its 1Z nm DRAM and (ii) complete development and begin mass production of its 1α-EUV node.

Micron Technology

Micron achieved a 44% YoY jump in its DRAM revenue in Q1 2021, continuing to grow fastest among the big three since the preceding two quarters. Micron was the first among the big three to begin mass production of 1α DRAM, accounting for one-fourth of the industry’s DRAM revenue. However, Micron’s 1α node is based on DUV, an older technology that may face severe cost competition once the EUV-based 1α DRAMs reach the mass market.

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Background:

Brady Wang

Siddharth Bhatla

Counterpoint Research
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Related Reports

Rising UFS Shipments Opens Up Opportunity for Western Digital and Toshiba Memory Corporation

The share of eMCP in mobile memory unit shipments has declined for the fourth consecutive quarter in Q2 2019 to 58.9% from 65.4% in Q2 2018, according to the latest research from Counterpoint. On the other hand, shipments of UFS grew rapidly at a rate of 44.3% quarter-on-quarter (QoQ) in Q2 2019, as almost all Android smartphones, priced around US$400 use UFS memory units.

We expect the growth momentum in UFS shipments to continue in the coming quarters as it has a higher read/write speed and input/output operations per second (IOPS), especially for applications that have to handle a large amount of data such as video and images. We expect UFS’ share in mobile memory unit shipments will increase to 35.5% in 2023 from 10.3% in 2018. The technology will be particularly dominant in the interface of high-end smartphones, especially due to the strong demand for 5G smartphones. Such a scenario is advantageous for WD (Western Digital) and TMC (Toshiba Memory Corporation) which have cutting-edge NAND flash technology but no DRAM production facility.

Exhibit 1: Quarterly Mobile Memory Unit Shipment, 1Q18 – 2Q19

Source: Counterpoint Research Sep 2019

Since 2014, eMCP has become the mainstream of mobile phone memory interface. However, the shares of WD and TMC in smartphones has remained low because they do not have their own DRAM production facility. But eMCP’s time is rapidly coming to an end with a demand for higher speed memory and larger storage capacity. In Q2 2019, the average capacity of UFS was 170.1GB, which is three times higher than eMCP’s 51GB and even higher than iOS’ 104.2GB in the same quarter.

Exhibit 2: Quarterly Mobile Memory Average Density, 1Q18 – 2Q19

Source: Counterpoint Research Sep 2019

Further, in Q2 2019, the overall UFS bit shipment was approximately 10,073 millions of GB, which was also higher than the eMCP’s 9,273 millions of GB. In order to take the opportunity to increase NAND flash sales, WD and TMC should work with smartphone OEMs to provide customized UFS mobile memory. They should also work with third-party NAND controller companies to provide UFS at a reasonable price and corresponding performance.

With the rapid adoption of uMCP, failing to push UFS aggressively do so will mean WD and TMC will hand over the advantage to companies like Samsung, SK Hynix, and Micron, who have both DRAM and NAND capacity.

Our data reveals that though the share of uMCP in Q2 2019 remained low compared to eMMC or UFS, its quarter-on-quarter (QoQ) and year-on-year (YoY) growth was at a record high of 91.5% and 1,882%, respectively as the base was low. Although the growth rates might normalize, we expect the demand for uMCPs to keep increasing.

For the mid-end smartphone market, we expect uMCP to become the mainstay. It is a combination of UFS controllers and low power DRAM, thus giving it the advantages of UFS’ fast speed and MCP’s small footprint. Therefore, uMCP is expected to replace the eMCP in the mid-end smartphone market and also eMMC in the high-end smartphones market.

Counterpoint will release its Q2 2019 quarterly tracker and forecast of mobile memory by interface and OEM early next week. In the Q1 2019, Counterpoint pointed out that that eMCP’s share in smartphones will continue to decline in response to demand for high-speed and high-bandwidth memory.

SK Hynix to Cut DRAM Production and Reduce Wafer Start of NAND Flash

SK Hynix will begin to cut DRAM production from Q4 2019 as well as reduce its NAND flash wafer start by 15% as compared to its 2018 output. Last quarter, the company had said it would reduce NAND flash wafer starts by 10%.

The fresh set of announcements come after the company reported an 89% year-on-year (YoY) decline in operating profit in Q2 2019. This was despite a 13% quarter-on-quarter (QoQ) increase in DRAM bit shipments, mainly due to the growing demand from the mobile and PC DRAM markets. However, DRAM prices are still weak. In fact, average selling prices (ASPs) have dropped by 24%. It was a similar story in the NAND flash market where the company’s shipments increased 40%, but ASPs were down 25%.

Exhibit 1: SK Hynix DRAM bit shipment and Blended ASP from 1Q18 to 2Q19

Source: Counterpoint Research – Memory Tracker and Forecast

Usually, both DRAM and NAND flash have the characteristics of a boom-bust cycle. As a result, these two products normally do not reach the bottom at the same time. Therefore, the production capacity is interchangeable to can make up for each other’s losses. However, this time, the situation is very different. Both DRAM and NAND flash are at the bottom of their bust cycle, which is hurting Samsung, SK Hynix, and Micron. It is still unclear how long the threat of the trade war between Japan and South Korea will last. In order to reduce the risk of raw material shortage as well as limited resources for investment, SK Hynix must choose between a cut in spending on DRAM or NAND flash.

Currently, spot prices of both DRAM and NAND flash have rebounded. However, contract pricing has not seen a significant rebound because of high inventory in the channels. Therefore, SK Hynix’s DRAM investment cuts can increase its bargaining power. However, this takes time and has risks since other competitors take this chance to grasp more share from SK Hynix. The two main applications of DRAM are smartphones and servers. The growth of both smartphones shipment and DRAM content will be limited while the server market is still in a downturn. Therefore, we expect that DRAM prices will rise marginally in the short-term but will continue to be weak afterward.

The situation for NAND flash is different. The demand for NAND flash in smartphones is still growing. The average storage size in smartphones in 2020 is expected to reach 72GB, up from 64GB in 2019. The storage size of the flagship smartphone will be at least 128GB in the H2 2019. In addition, the demand for NAND flash in SSDs is also growing. Both PCs and servers require larger and faster NAND flash. The mainstream capacity of SSD in PC is moving to 512GB from 256GB. The average capacity has also risen to 321GB. As the unit price of NAND flash declines, the penetration rate of SSD in both PC and server will also increase significantly. Therefore, we expect to see the penetration of SSDs in PCs continuing to rise and cross the 50% mark this year. The NAND flash market is expected to recover in Q4. Demand will increase as prices decline. As a result, it can help companies like SK Hynix increase the bit growth and improve the utilization rate of their production lines.

In conclusion, it makes sense for SK Hynix to cut DRAM investment. In the case of limited resources in raw material and CAPEX, the bit growth of DRAM will be lower than that of NAND flash. SK Hynix should immediately stop producing 36 and 48 layer products as they are not economically viable. Instead, the company can do better by focussing on improving the yields, increase the capacity of NAND flash, its 96 layer products, and even 128 layer NAND flash. This can increase utilization and effectively reduce costs.

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Insights Tag: SK Hynix

50MP Image Sensors to Retain Growth Momentum in 2022

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Infographic: Q4 2021 | Semiconductors