Here's Why Mobile DRAM Industry Is Poised to Pop

With new memory standards rolling in, the mobile DRAM industry is poised to pop. Can Micron deliver another year of exceptional results?

Jan 28, 2014 at 6:00PM

Mobile DRAM memory standards are evolving fast. Leading memory module manufacturers, namely Samsung (NASDAQOTH:SSNLF), SK Hynix, and Micron (NASDAQ:MU), have begun sampling their next-generation LPDDR4 modules before full-fledged roll-out. In addition, LPDDR2 memory is being gradually replaced by its successor, LPDDR3. What should be your next move? Let's find out.

Understanding technical jargon
Mobile devices like ultrabooks, smartphones, and tablets are equipped with low-power DDR memory, or LPDDR, to minimize overall power consumption. Compared to their desktop counterparts, mobile memory modules are designed to operate on relatively lower voltages and generate less heat.

Currently, most budget mobile devices are equipped with LPDDR2 memory, while premium smart devices like Apple's (NASDAQ:AAPL) iPhone 5s are equipped with LPDDR3 memory, which is approximately 60% faster than LPDDR2 memory. Though that's a fantastic performance boost, there are some shortcomings as well. Only high-density LPDDR3 modules, which generally have higher fabrication costs, have the bandwidth to execute memory-intensive tasks like 4k rendering.

To meet the rising demand for memory bandwidth while keeping fabrication costs in check, Samsung developed the world's first 1GB LPDDR4 memory last month. Compared to the fastest LPDDR3 memory modules, its LPDDR4 module is supposed to be 50% faster and consume 40% less power. Shortly after this launch, Micron and SK Hynix also unveiled their respective LPDDR4 memory modules.

What's the future of LPDDR?
In a research note issued last month, TrendForce noted that the LPDDR3 memory standard will become mainstream in 2014 and ultimately replace the current LPDDR2 standard. The research firm, however, noted that LPDDR5 modules will be manufactured in limited quantities during 2014 and will not go mainstream until 2015.

The increasing number of LPDDR3-equipped mobile devices will compel Apple and Samsung to equip their respective flagship smartphones and tablets with the latest LPDDR4 modules. This will enable them to deliver an un-rivaled user experience and eventually separate their flagship devices from the crowd. 

Investors should also note that Intel's upcoming Broadwell platform is expected to support LPDDR4 memory standards and, consequently, Samsung and Apple might want to equip their ultrabooks and laptops with LPDDR4 memory modules. Altogether, these factors suggest that the demand for DRAM modules will continue to grow in 2014 as well. But, which DRAM manufacturer should you pick? 

Picking a pure-play
Being a pure-play memory module manufacturer, Micron's financial performance is directly correlated with its DRAM module sales. The company acquired Elpida Memory last year, which in turn expanded Micron's DRAM production capacity by almost 45%.

In addition, Elpida Memory expanded Micron's mobile DRAM product portfolio and brought valuable clients like Apple along, thus positioning it as a formidable competitor in the mobile DRAM industry. As Trefis noted, the inclusion of Elpida's earnings boosted Micron's quarterly DRAM earnings by 69%, sequentially.




SK Hynix

DRAM Market Share




Speaking of its operations, Micron's president recently noted, "We are the first supplier to sample low-power DDR4 to our customers and chipset partners. This allows them to debug their next-generation systems and reference platforms with Micron solutions." So, with valuable clients like Apple and a technological head start, Micron seems particularly well-positioned to yield handsome returns over the coming year.

Final thoughts
The DRAM industry is booming and Micron stands to benefit greatly. But, as described in my previous article, rising DRAM supply from SK Hynix and Samsung can put short-term pressure on DRAM prices. So, investors also need to understand the risks involved with investing in Micron.

Profit from the next technological revolution
There are few things that Bill Gates fears. Cloud computing is one of them. It's a radical shift in technology that has early investors getting filthy rich, and we want you to join them. That's why we are highlighting three companies that could make investors like you rich. You've likely only heard of one of them, so be sure to click here to watch this shocking video presentation!


Piyush Arora has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers