全球存储器半导体2020年展望

1、GlobalResearch2 December 2019UBS Global I/OEquitiesMemory SemisEquitiesSemiconductorsGlobal2020: All on board or abort?SemiconductorsGlobalMemory operating profits may trough in 1Q20, pace of recovery key question On the back of our recent industry visits and proprietary demand analysis (notably on

2、server DRAM), we update our memory supply / demand model and roll it out to 2021. Weforecast2020tobeatransitionyear,beforethememoryupcyclefullygatherspace into 2021. Upside to DRAM pricing may support the shares in the near term. But the risk of a NAND double dip, uncertainty on end-demand vs recent

3、ly increased expectations,notablyrelatingto5G,aswellasvaluationcouldleadtomoreofarange- bound pattern for the shares vs a clean breakthrough.Upside to DRAM contract pricing in 4Q19, although inventories also re-building Insofarin4Q19,webelieveserverDRAMprocurementhascontinuedtotrendaheadof expectati

4、ons.ThisisleadingtosomeupsidetoblendedDRAMcontractpricing,which we now forecast to decline 5.5% QoQ (was -8%). This is raising more hopes of tightening into 1Q20, and we now forecast -3.0% QoQ in 1Q20 (was -7.0%) and flat in 2Q20 (was -3.0%). All that said, it also appears that server DRAM procureme

5、nt continuestoprecedeamoresubstantialinflexioninenddemand.WeestimatethatUS hyperscaleDRAMinventoriesarebackabove8weeks,whilstweestimateHuaweiholds over 10 weeks of DRAM inventories. This makes a more sustained turn in servers procurement all the more important, with how widely available Intels Ice L

6、ake server CPU will be in 2H20 a crucial factor.NAND flash: keeping a double dip scenarioConversely,wefoundindustryparticipantsmovingclosertoourdoubledipscenario for NAND flash contract prices. We now expect -2% QoQ in 1Q20 (after still +5% in 4Q19) and -7% in 2Q20. We continue to expect this to be

7、triggered by Kioxia/WDC movingbacktofullindustrycapacityutilisation(likelybyyear-end).Inaddition,mostof Xian X2 Phase 2 (c. 45k wpm on top of existing 20k) will be installed by 2Q20, whilst Samsung will also push towards 20% conversion of total capacity to 128L. Both will add to supply re-accelerati

8、ng into 2H20.Relative preference for Samsung as longer term profit share gainerAt 1.38x NTM Book, memory stocks are close to mid-cycle averages, and hence discountspartoftheupcycleahead.WecontinuetopreferSamsung(Buy),asthelikely profitsharegainer(throughNAND)inthenextupcycle,overWesternDigital(Neutr

9、al).Figure 1: Global memory ValuationNicolas Gaudois HYPERLINK mailto:nicolas.gaudois +852-29715681TimothyArcuri HYPERLINK mailto:timothy.arcuri +1-415-3525676Kenji Yasui HYPERLINK mailto:kenji.yasui +81-3-52086211MunjalShah HYPERLINK mailto:munjal.shah +1-212-7132113Taewoo Lee HYPERLINK mailto:taew

10、oo.lee +852-29716873PradeepRamani HYPERLINK mailto:pradeep.ramani +1-415-3525517Bill HYPERLINK mailto:bill.lu +852-29718360David Mulholland,CFA HYPERLINK mailto:david.mulholland +44-20-75684069Jimmy AssociateAnalyst HYPERLINK mailto:jimmy.yoon +852-37124671CompanynameTickerRating Mkt Cap(US$mn)Price

11、PriceTargetMemoryMicronTechnologyMU.ONeutral55,100US$47.51SamsungElectronics 005930.KSBuy254,438 Won50300 SKHynix000660.KSNeutral49,904 Won80900 WesternDigitalWDC.ONeutral15,099US$50.3320EPE21EPE20EPB21EPB1.501.411.491.361.271.091.281.0433.412.920.211.262.16.417.27.3Source: UBS estimates, priced as

12、of 29November, 2019 HYPERLINK /investmentresearch /investmentresearchThisreporthasbeenpreparedbyUBSSecuritiesAsiaLimited. ANALYSTCERTIFICATIONANDREQUIREDDISCLOSURESBEGIN ONPAGE25. UBSdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbe aware that the firm may

13、have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.UBS Research THESIS MAPMOSTFAVOREDLEASTFAVOREDSamsungElectronicsWesternDigitalPIVOTALQUESTIONSQ: When will the memory cyclet

14、urn?WeexpectDRAMcontractpricestomodestlydeclinein1Q20,andstabilizein2Qendinga7-quarters long downcycle with contract prices down 59% peak-to-trough. As for NAND flash, we expect the recent increase in NAND flash contract prices to be short-lived. As the industry goes back to full capacity utilizatio

15、n, we forecast pricing to start declining again in 1Q20. This could be aggravated by Samsung ramping up production in Xian X2. HYPERLINK l _bookmark1 more Q: When will server DRAM growth re-accelerate?By 2020. We forecast server DRAM bit demand growth of 11.3% YoY in 2019, down from 38.5% in 18. Thi

16、s is predicated upon server units down 5.2% YoY in 2019 after +13.1% in 18. We then forecast servers unit growth to return in 2020 and 2021 (+5.4% / +4.7% YoY respectively) driven by thehyperscalereplacementcycle,aswellasIntelrollingoutIceLakeforservers.Thisshouldliftoverall serverDRAMbit(end-demand

17、)growthto+28.1%YoYin2020and+28.5%in2021.Butprocurement growthin2020couldbe5-7pctptslowerthanthisascustomershavealreadyrebuiltsomeinventories. HYPERLINK l _bookmark2 more Q: How could the memory industry re-shape over the next 3 years?WeforecastthatSamsungmaykeepinthenextDRAMupcyclearelativelystablep

18、rofitsshare.Overall DRAM industry profits may however fail to recover 2017-18 levels as the industry has a lot more floor spaceavailablethistime,andhyperscalecustomersmaycomebackinamoreorderlymanner.InNAND though, we could see profits growth stemming from price elasticity, but Samsung gaining a high

19、er shareoftotalindustryprofits.EarlyevidenceofthiscomesfromSamsungre-acceleratingNANDcapex well ahead of peers, and the cost leadership it gets from its 92/128L single stack. We expect a more material impact on NAND supply / demand from YMTC by 2021, whilst the impact on DRAM from China new entrants

20、 will likely remain very limited. HYPERLINK l _bookmark3 more WHATSPRICEDIN?Memory stocks are trading at 1.38x average NTM P/B, just above mid-cycle historic levels. Unusually so, memory stocks have performed relatively well ahead of any inflexion in earnings expectations. This may suggest that they

21、 may be range-bound until more evidence of a sustained cyclical recovery emerges.UBSVIEWWe expect memory profits to trough by 1Q20, followed by a modest, gradual recovery. The keyforDRAMwillbedemandgrowth,withsmartphones(5Gsupportingvolumes)andservers(IceLake helping stemming a refresh cycle) the ma

22、in drivers to watch. For NAND, we expect a double dip as theindustrygoesbacktofullcapacityutilisation.OverallthisstillleavesusbelowconsensusforCY20E.EVIDENCEUBS memory supply/demand model points to the DRAM cycle troughing 2Q20, whilst NAND may(slightly)double-dip.DRAMdemandshouldgatherpaceby2H20.Th

23、einvestmentcycleappears tobeundercontrol,butexcessinventoriesremain(currentlymovingdownstream).NANDflashisnow slightlyundersuppliedthankstopricingelasticity,butTMC/WDCoutputisstilltobacktofullandwhen it does, we could see this triggering a double dip.UBS proprietary server DRAM demand points to 2019

24、 being a transition year. We forecast top-7 hyperscaler server units procurement down 17% YoY in 2019 (overall Hyperscale -10% YoY). We forecast +13% for the top 7 hyperscalers server units procurement in 2020, and 10% for overall hyperscale.IntelindicatedthatIceLakeserverCPUsshouldcomeoutin2H20.Thi

25、sshouldhelpdrivea more meaningful re-acceleration of server DRAM bythen.Wafer fab equipment orders to validate (or not) our thesis on Samsungs NAND strategy. We wouldexpectre-accelerationinthenext2-3quartersasSamsungreadiestherampupofXianPhase2.Figure 2: Memory Semis stocks - Upside / Downside spect

26、rumDownside Case (25% probability)Base Case (50% probability)Upside Case (25% probability)EventHyperscale demand recovery fails toHyperscale DRAM demand recoversHyperscale DRAM demand does startdecisively recover in 2020 as Ice Lakemore meaningfully starting 2H20.to inflect more than expected inis d

27、elayed. Huawei on Entity List for aHuawei on Entity List but licenses are1Q20. US grants licenses for USwhile & no key licenses granted. 5Ggranted for US suppliers intosuppliers to supply smartphonedelays contributes to smartphoneSmartphones.Samsungdoesrampupcomponents to Huawei by 4Q19.units declin

28、ing again in 2020.Xian X2 (NAND) in 2020. No materialSamsung adjust memory capacityInventories hence still well in excessDRAM wafer capacity addition barramp up due to end end-demand.end 20. Samsung still increases 20start of Pyeongtaek P2.NAND capex to assert market share.OutcomeBlended DRAM contra

29、ct prices -30%Blended DRAM contract prices -18%Blended DRAM contract prices -7%YoY in 2020; single-digit declinesYoY in 2020; contract prices flattenYoY in 2020; contract prices flatten toevery quartersby 2Q20 and start going up in 2H20small increase QoQ in 1Q20 and buildBlended NAND flash contractB

30、lended NAND flash contractup momentum from hereprices -20% YoY in 2020; sequentialprices -11% YoY in 2020; sequentialBlended NAND flash contract pricesdeclines resume in 1Q20 and build updeclines resume in 1Q20 and+6% YoY in 2020; single-digit QoQto double-digit by 3Q20attenuates by 3Q20increases co

31、ntinue into 2020Stocks impactc. 20% downside from here as stocksMemory stocks remain range-bound.Stocks recover c. 20% from currentbriefly test 1.1x forward PB. Key driverOn the positive side, DRAM pricinglevels as DRAM pricing startswould be prices declines continuing,upside in 4Q19 supports share

32、prices.inflecting earlier than expected.which is well out of consensusOnthenegativeside,1H20consensusValuation edges closer to c. 1.5x NTMdownside remains & valuations haveBook.expanded to the point of discountinginitial cyclical inflexion.Source: UBS estimatesFigure3:GlobalMemory12mrollingforwardP/

33、BVFigure4:SKHynix12mrollingforwardP/BVvs%ROE2.53.560%2.03.02.540%20%1.51.0Jan-100.5Jan-102.01.51.00.50.00%-20%-40%-60%Jan-19Jan-19Jan-11Jan-12Jan-13Jan-18Jan-19ForwardP/BVAvg+1STD-1STDHynixP/BV(LHS)% ROE(RHS)Jan-11Jan-12Jan-13Jan-18Jan-19Source: Company data,UBSestimatesSource: Company data, UBSesti

34、matesFigure 5: UBS Global Memory/Semicap valuation comparisonsCurrentCompanynameRatingPriceMemoryMicronTechnologyNeutral US$47.51SamsungElectronicsBuy Won50,300 SKHynixNeutral Won80,900 WesternDigitalNeutral US$50.33US$60EV/Sales20E21E22EEV/EBITDA20E21E22EPE20E21E22EPBV20E21E22E1.501.411.231.491.361

35、.231.271.090.931.281.040.84.02.82.533.412.97.0AverageSemicap EquipmentASMLBuy247.00265ASMPacificTech.Neutral HK$102.20 AppliedMaterialsSell(CBE) US$57.90DiscoNeutral 23,620 EugeneTechnologyBuy Won13,950 To

36、kyoElectronNeutral 22,600 KLACorporationSell US$163.86 US$140LAMResearchSell US$266.83 SCREENHoldingsNeutral7,630TeradyneNeutral US$62.59WonikIPSBuy Won30,500 Won400003.723.610.41.381.221.067.927.086.353.152.892.656.496.807.723.433.202.971.251.040.943.843.473.169.808.597.407.878.537.631.681

37、.551.439.047.857.182.081.661.504.04.00.921.717.016.015.714.312.715.213.812.811.711.010.312.313.311.57.06.05.415.412.46.226.920.318.617.815.214.516.914.812.429.026.424.33

38、18.718.017.416.016.012.817.315.412.016.114.713.922.57.512.7Average10.710.220.515.694.45Source: Company data, UBS estimates. Priced as of 29November 2019; ex SK Hynix PE averageSIGNPOSTS DRAMIn order to see whether our thesis is playing out, heres what well be

39、 tracking:DATA RELEASE /DATA RELEASE / EVENT DATEWHAT WEEXPECT4Q19DRAM inventory levelsUnlikely to have normalised byend-2019We estimate that customer inventory levels are above 8 weeks for US hyperscale servers, largely stable for mobile OEMs at 4-5 weeks and above 10 weeks for Huawei; normal level

40、s are 4 weeks for hyperscalers and 2-3 weeks for OEMs. DRAM makers are continuing to reduce inventories in line with forecasts, but are likelytoexit2019withexcesslevelsforSamsungat4.0weeksandSKHynixat4.5 weeks (forward). Both Samsung and SK Hynixs finished goods DRAM inventories stood at 5.0 weeks a

41、t the end of September.4Q19-20 Supply outlookModest re-acceleration by2H20Weforecastindustrynetwafersouttotroughin3Q20.WeexpectSamsungto convertsomeofLine13fromDRAMtoCMOSsensorsin2020(c.30-35kwpm), although it could bring up capacity in P2 (c. 25k wpm slightly morethan expected)tolargelyoffsetitin3Q

42、20.WhileSKHynixannouncedconvertingM10 toCMOSsensors,themagnitudeappearstwicelessthanweexpected(c.30-40k wpm).Micronismakingprogressesin1znmconversionandSKHynixfor1ynm (largelyequivalent),whileSamsungappearstoslowlyramp1znm(c.40kwpm out by 4Q20).4Q19-20 Mobile DRAMdemand(38% of total volumes in 2019E

43、)4Q19-20 Server DRAMdemand(24% of total volumes in 2019E)Mobile DRAM demand bit growth of 21% YoY in 2020Weforecast5Gtosupportoverallsmartphonesunitsales,andforecast1%YoY unit growth in Sell In in 2020 post -2% in 2019. We forecast mobile DRAM contenttogrowfrom4.14GBin2019to4.85GBin2020.Withinthis,w

44、eexpect theiPhonesegmenttogrowthemostasAppleadopts6GBforweexpecttwo modelsin2020 (currentlyallnew2H19modelare4GB).Wenotethat5Gisnot perseaccretivetomobileDRAMcontent,unlesswhenenablingincrementalapps such as AR/VR or 4K streaming.Ice Lake CPU refresh remains key to 2H20 accelerationWeforecasthypersc

45、aleserversunitprocurementtobedown10%YoYin2019. Sofar,serverDRAMprocurementseemstobeimproving.Thismaybeaheadof end-demand actually improving. Intel indicated in its 3Q19 conf call thatIce Lake(10nm)serverprocessorrefreshremainstargetedfor2H20.Weexpect strategiccustomerstogetaccessfirst,andwideravaila

46、bilityin2021.Weexpect thistobeakeydriverforanaccelerationofserverprocurementrefresh.Hence we forecast hyperscale servers unit procurement up 10% YoY in 2020, and overallserverDRAMbitdemandgrowthtoaccelerateto28.1%YoYfrom 11.3%in2019.Procurementwilllikelygrowlessthanthis(byabout5-7pct points)in2020as

47、customersalreadybuiltinventories.2020-21 China DRAM industrybuild-up (less than 1% industrysupplyby2021E)A long-term risk but gated by US/China Trade/IP disputeInthecurrentstateoftechnologyrestrictiononsemismanufacturingequipment salestoJinhuaIC,itisunlikelythatitcanrampuppilotproduction.Conversely,

48、 areversalofsuchbandandaresolveontheIPdisputebetweenJinhuaICand Micron could present upside risk to supply over time. CXMT/Innotron (the other ChinaDRAMcontender)continuestoinvest,butatamodestpace.Tsinghua UnigrouphasannouncedrampingupDRAMinanewfabinChongjintargeting MP in21.Source: UBSSIGNPOSTS NAN

49、DFlashIn order to see whether our thesis is playing out, heres what well betracking:DATA RELEASE /DATA RELEASE / EVENT DATEWHAT WEEXPECT4Q19NAND inventory levelsLargely normalised by4Q19We estimate that Samsung/SK Hynix finished NAND inventories came down to2.5weeks/6.7weeksendofSeptemberrespectivel

50、y,whichimpliesSamsung willend2019withnormalizedlevelswhileSKHynixwillstillhaveresidual excessinventoriesattheendof19.DownstreamNANDinventoriesarewe estimate close to 3-5weeks.4Q19-20 Supply growthNet wafers will start growing again in2020Kioxia/WDCscapacitywaspoweredofffromJune15th-30th,andisexpecte

51、dto eventuallyrampupbacktofullinputbyYE,adding7%toindustrywafer starts. Samsungs net wafer starts are sliding down into year-end as some legacycapacityisphaseddown,butthiswilllikelybefollowedbyanincrease asXianX2rampsupwebelievetowards65kwpmwafersoutby4Q20.We estimateSKHynixwillseec.20%YoYdeclineinn

52、etwaferstartsin4Q19. Samsung is ramping up 128L towards 100k wpm out by 4Q20 and will leveragesignificantcostleadership.Ontheflipside,otherplayersappearin transit:MicronmovingtoChargeTrap,Kioxia/WDCmovingto112L,SKHynix latein96L(althoughmorepositiverecentlyon128Ltransition).4Q19-20 NAND flash demand

53、Price elasticity starting to kickinAs NAND flash prices continued to decline, SSD (all Flash) storage becomes moreaffordable.Thisisfinallyleadingtoapick-upinclient(PC)SSDdensity increases,aswellasaccelerationinenterprisestorageSSDdeployment(both havingbeennegativelyimpactedin2017byhighprices).Wefore

54、castSSDbit demand growth forecast of 48% YoY for 2020, after 38% YoY in 2019 (slightly weaker than initiallyexpected).2020/21 Samsungs NAND strategy2020/21 Chinas 3DNANDaspirations and US/China Trade/IP warSamsung to accelerate capacity ramp in 2020WebelievethatSamsungwillacceleratecapexfasterandstr

55、ongerthanany otherNANDmakerin2020.Samsungssinglestackstructureappearsto achieve costs benefits vs peers using multi-stacking at comparable yields, whilstitcommandsfornowayieldadvantage.Theseconddriveristhatwith6 (soon7)playerstheNANDindustryhasroomforconsolidation.Thiswill motivateSamsungtofirstouto

56、fthegatewithNANDwafercapacityadditions in 2020. This could bias up Samsungs expected 2020 bit growth from expectationsof30%YoYorlesstoUBSe32.5%andabove.Clearlyby2021, weexpectSamsungtooutgrowpeersasXianX2continuestorampand128L isrolledouttoChina.NotethatSamsungsnexttechnology19xLwill likely mark the

57、 first move to dualstacking.YMTC to enter the NAND flash market in 2020YMTCstarted64Lmassproductionthissummer.YMTC,beingpartofTsinghua Unigroup, is well supported. Moreover, NAND Flash is inherently easier to manufacturethanDRAM.Assuch,webelieveYMTCalonecouldbemoreofa disruption into the NAND flash

58、market than Chinas DRAM players. YMTCis targeting we believe 30k wpm 64L output in 2020 with Huawei a key customer,and100kwpm128Ldualstackin2021.Ifsuccessful,bythen,itwill bemoreofadisruptiononoverallindustrysupply/demand.Source: UBSMemorySemisUBSResearchOURTHESISINPICTURESreturn We expect the DRAM

59、downcycle to end by 2Q20, with gradual positive inflexion into 2H20WeexpectNANDflashcontractpricestodouble-dip withpricesstartingtodeclineagainin1Q2025,00020,00015,00010,0005,00060%50%40%30%20%10%Wenowforecastmemoryindustryoperatingprofitsto trough by 1Q20 largely in line with consensus. The diverge

60、nceinviewsrelatemoretothepaceofprofits recoveryQ116Q316Q117Q317Q118Q318Q119Q319Q120EQ320EQ121EQ321E00%Q116Q316Q117Q317Q118Q318Q119Q319Q120EQ320EQ121EQ321E0MemoryOP(US$mn)% OPM50%40%30%20%10%0%-10%-20%2021E-30%2021EMemory capex is starting to inflex in 2020, solely driven so far by Samsung (notably N