We are a global leader in specialty memory solutions, serving the electronics
industry for over 25 years. As part of our global business, we have established
a leading market position, as measured by market share, in Brazil as the largest
in-country manufacturer of memory for desktops, notebooks and servers, as well
as mobile memory for smartphones. We also have a leading market position worldwide,
as measured by revenue, in specialty memory where we work closely with original
equipment manufacturer, or OEM, customers to develop memory solutions, which
incorporate customer-specific requirements. We believe our customers rely on
us as a strategic supplier due to our customer specific designs, product quality
and technical support, our global footprint and, in Brazil, our ability to provide
locally manufactured memory products. We also provide customized, integrated
supply chain services to certain OEM customers to assist them in the management
and execution of their procurement processes. Our global, diversified customer
base includes over 250 end customers such as Cisco Systems, Inc., or Cisco,
Samsung Electronics Co., Ltd., or Samsung, Hewlett Packard Enterprise, or HPE,
Dell Technologies, or Dell, and LG Electronics, or LG.
Memory continues to be critical to system performance. With the growth in mobility,
cloud computing and data intensive applications, the importance of and demand
for memory continues to increase. Based on industry data, we believe that worldwide
demand for DRAM and NAND Flash memory units will increase by over 110% and 350%,
respectively, when comparing 2021 to 2016. The increasing diversity of demanding
applications requires memory solutions tailored to meet these varying and growing
needs. Memory density also continues to increase. We believe that 8Gb die will
be the next leading DRAM density, which will drive DRAM bit growth. Based on
industry data, we believe 8Gb die will account for 40% of worldwide DRAM bit
shipments in 2017, up from 7% in 2015. Based on industry sources, we believe
that 8Gb die will grow rapidly in 2018, with 8Gb die accounting for over 45%
of worldwide DRAM bit shipments by 2018. Higher memory densities, lower power
requirements and increasingly smaller form factors are especially important
in mobile and embedded devices, where high performance and lower power consumption
are critical.
Stabilization of DRAM market. Industry consolidation, increased capital expenditure
requirements, continued technology advancements and the shift in new production
from DRAM to NAND have stabilized global DRAM supply and pricing in recent years.
Furthermore, based on industry data, we estimate the top three DRAM suppliers
to have over 90% of the worldwide market share in 2016. In addition, based on
industry reports, we believe an increase in worldwide DRAM demand is being driven
by widening applications as usage of DRAM for smartphones is increasing along
with worldwide consumption of DRAM for desktops, notebooks and servers. We believe
this trend is expected to continue through at least 2021. Continuous advancements
in process geometries require significant capital investments, making it difficult
for new entrants and for existing suppliers to increase memory supply.
Flash memory market continues to grow. Flash consumption is driven by the growth
in demand for smartphones, solid state drives, or SSDs, for notebooks, servers
and cloud computing, and other NAND based applications.
Increasing local content requirements in Brazil and other incentives. Local
content requirements have been central to the Brazilian regulatory environment
since the 1960s. These regulations are aimed at promoting job creation, sustaining
economic growth and increasing the competitiveness of various domestic industries,
and have helped enable a significant expansion of the Brazilian middle class.
Local content requirements have been instrumental in the development of numerous
key industries in Brazil, including automotive, oil and gas, aerospace, healthcare
and IT. For example, local content regulation in Brazil’s automotive industry
has helped the country become the world’s eighth largest automotive market
and tenth largest producer of cars and commercial vehicles in 2016, according
to the International Organization of Motor Vehicle Manufacturers. Once implemented,
Brazil’s local content requirements have been generally maintained or
increased over time. In 2012, regulations were passed that require that automotive
companies perform certain manufacturing activities in Brazil, and the granting
of tax relief is conditioned on the amount of local content applied within the
manufacturing process.