By Jonathan Cassell
While the semiconductor supply chain has been focused on the shortage of critical memory types used for data center AI acceleration, the rising prevalence of generative AI smartphones is spurring another memory shortfall: LPDDR5X.
The year 2024 marks a comeback for the global wireless market, driven by a recovery in smartphone sales. Global smartphone shipments are set to increase in the low single-digit percentage range in 2024, compared to a low single-digit decrease in 2023, according to market watchers.
This swing from contraction to growth is driving a more than 25% rise in smartphone semiconductor revenue in 2024. However, when memory is removed from the equation, the growth slows to the high single-digit range.
The disproportionate share of wireless semiconductor growth driven by memory is being spurred by the massive sales growth of the new wave of smartphones incorporating generative AI acceleration hardware. These phones require AI performance of at least 30 tera operations per second (TOPS).
To support this demanding requirement, generative AI phones require memory with extremely high bandwidth. The memory of choice for these new smartphones is the latest version of the low-power DDR SDRAM technology, LPDDR5X. Smartphones, including Apple’s iPhone 16 and Samsung’s Galaxy S24, use LPDDR5X.
LPDDR5X supports data rates in the 8.5 gigabit per second range, with up to 33% faster performance and 24% greater power efficiency than the previous-generation memory, LPDDR5. LPDDR5X carries a significantly higher average selling price (ASP) than LPDDR5. AI tasks also require higher memory usage, with the iPhone 16 and iPhone 16 Plus using 8 GB of SDRAM, an increase from the 6 GB in previous models.
The combination of booming demand, higher ASPs and increased memory density are spurring constrained supplies and rising prices for LPDDR5X. Older versions of LPDDR are also encountering rising pressure, with LPDDR1-LPDDR4 DRAM undergoing increased supply chain risk in Q4 and Q1, according to Commodity IQ.
Along with HBM, LPDDR5X memory is helping drive up memory market revenue, with an increase of more than 60% expected in 2025, according to one researcher. This robust growth is leading to supply constraints for certain memory devices.
However, Commodity IQ anticipates that Q2 will bring some relief, with demand, pricing and lead times for LPDDR memories returning to a state of stability. Buyers should delay quotes as much as possible until signs of supply stabilization appear.
Jonathan Cassell is the lead analyst for Supplyframe Commodity IQ.