Growing memory needs of cloud computing will prompt more investment in semiconductor fabrication in 2018, Citibank analysts write:
“Recent supply chain discussions with equipment suppliers indicate strong or 2x DRAM content growth at Cloud service providers like Amazon/Microsoft driving 20-30% Y/Y server bit growth or above the mid to low teens supply growth commentary by DRAM makers.
Average server DRAM content is doubling to 200GB this year at cloud service providers with some using 300GB on multi core CPU proliferation and Skylake introduction. Together DRAM + NAND server BOM is approaching 70% or up from 30-40% last year on higher pricing amidst DRAM shortages.
Overall, we believe mid to low teens DRAM supply bit growth on 1y/1z migration would not be enough to meet growing Cloud server demand unless new fabs/capacity is added.”