Increase in DRAM consumption
According to DRAMeXchange, server and smartphone shipments will drive the Chinese memory market. DRAMeXchange forecasts DRAM (dynamic random access memory) consumption in China to reach $12 billion at the end of fiscal 2015. It expects NAND (negative-AND) flash consumption to reach $6.7 billion in the same period. China constitutes 21.6% and 29.1% of the global DRAM and NAND flash revenues, respectively, for 2015.
China’s purchasing power in the DRAM segment is increasing
Avril Wu, assistant vice president at DRAMeXchange, said, “Increasing shipments of Chinese branded PCs and smartphones in recent years have contributed to the overall DRAM demand. China’s top PC maker Lenovo and the global PC market leader HP are neck on neck on shipments, and this is an indication that the Chinese brand vendors’ purchasing power in the DRAM market is getting stronger every year.”
According to TrendForce, seven of the top ten smartphone vendors originate from China. They manufacture Android phones, which consume a greater amount of memory compared to Apple’s (AAPL) iOS devices. The server DRAM segment has also seen growth, driven by IoT (Internet of Things) in recent years.
As reported earlier, China is now looking to set up a semiconductor industry domestically with a priority to design, produce, and sell its own products. Top manufacturers in the memory chip segment such as Samsung (SSNLF), SK Hynix, and Micron Technology (MU) will face competition from Chinese manufacturers in this segment.
In order to get exposure to Micron Technology, you can invest in the iShares PHLX Semiconductor ETF (SOXX) and the VanEck Vectors Semiconductor ETF (SMH). Micron Technology constitutes 3.6% of SOXX and 3.4% of SMH.