Taipei, Monday, November 30, 2015 16:04 (GMT+8)
mostly cloudy
DRAM market improving, says iSuppli
Press release; Jessie Shen, DIGITIMES [Thursday 30 July 2009]

Amid a shortage of DDR3 memory and a resulting rise in pricing, iSuppli has upgraded its rating of near-term conditions for DRAM suppliers to positive. The research firm had maintained its negative rating since September 2008 until it upgraded the condition to neutral two weeks ago.

"The improvement in circumstances is a welcome relief to a DRAM market that has been stuck in a state of oversupply for nearly three years," said Nam Hyung Kim, chief analyst for iSuppli. "The oversupply has been a disaster for the global DRAM industry, with revenues dropping from US$34 billion in 2006 to US$23.6 billion in 2008." During this period, the profitability of DRAM suppliers evaporated completely, and the combined operating loss for the entire DRAM industry amounted to US$15 billion during the last three years.

"With rising demand and limited supply for DDR3, the global DRAM industry is set for a sustainable recovery that will extend into the fourth quarter and pave the way for a robust annual increase in 2010," Kim continued.

DRAM revenues plunged by 19.5% in the first quarter compared to the fourth quarter of 2008, according to iSuppli. However, with the rise in DRAM pricing, revenues increased by 37.5% in the second quarter compared to the first. Revenues are set to continue to rise on a sequential basis by more than 20% each in the third and fourth quarters, the research firm forecast.

In addition, Kim observed a shortage of DDR3 chips during his visit to Asia. "The suppliers reported PC OEMs are making a rapid shift from DDR2 DRAM, which has been the industry standard for nearly three years, to DDR3. However, they have not yet ramped up production of DDR3 enough to meet this new demand," according to Kim.

DDR3 captured only 8.4% of total bit shipment in first-quarter 2009 and is estimated to reach 15% of total bit shipment in the second quarter, iSuppli indicated. The research firm now predicts the DDR3 shortage will persist during the third quarter because suppliers won't be able to meet current demand.

While the limited investment of DRAM suppliers is slowing their 50nm migration—a process necessary to ramp up DDR3 production quickly—the DDR3 shortage will cause supplies of DDR2 to tighten as first-tier suppliers continue to convert production from DDR2 to DDR3, iSuppli noted.

However, if DDR2 prices rise, Taiwan-based suppliers are likely to increase their utilization rates limiting price increases, iSuppli warned. Thus, a recovery in DDR2 prices could be limited, widening the price gap between DDR2 and DDR3. The price crossover between DDR2 and DDR3 is likely to arrive near end-2009 or in early 2010, iSuppli expects.

"Prices are rising in the third quarter, a time when DRAM buyers typically begin to make purchases for the holiday season," Kim noted. "Adding to the current tight supply for notebook LCD panels, the increase in DRAM prices will result in lower profitability for the PC makers in the second half of the year."

iSuppli: Worldwide DRAM revenues, 1Q08-4Q09 (US$m)

Source: iSuppli, compiled by Digitimes, July 2009

Realtime news
  • Sharp expected to move headquarters, says report

    Displays | 1min ago

  • Digitimes Research: Global all-in-one PC shipments to drop 3.9% on year in 2015

    IT + CE | 3min ago

  • Sharp to sell production equipment and patents to China and India makers to improve finances, says report

    Displays - Newswatch | 17min ago

  • TSMC to dispose of more Motech shares

    Bits + chips | 35min ago

  • Upstream supply chain expects new Nintendo games console to achieve 10-12 million unit shipments in 2016

    IT + CE | 47min ago

  • Neo Solar Power adjusting allocation of solar cell capacities

    Green energy | 1h 24min ago

  • Samsung aims to drop AMOLED pricing to within 10% of LCDs in 2016, says report

    Displays - Newswatch | 1h 37min ago

  • Shipments of large-size LCD panels will drop in 2016 but total area will expand by 8%, says WitsView

    Displays | 1h 38min ago

  • Open bids for 2,500-2,600MHz bands increase to NT$23.820 billion, says NCC

    Mobile + telecom | 1h 48min ago

  • Taiwan 4Q15 economic growth rate forecast at 0.49%, says DGBAS

    Bits + chips | 2h 9min ago

  • GCL-Poly Energy to reduce solar wafer supply to Taiwan cell makers

    Green energy | 3h 37min ago

  • ECS to ship 2.5 million education tablets

    IT + CE | 3h 50min ago

  • SSD contract prices fall for 4 straight quarters, says DRAMeXchange

    Bits + chips | 3h 57min ago

  • PCB firm Unitech looks to automotive, IoT applications for 2016 growth

    Bits + chips | 3h 59min ago

  • The smartphone ambition: Q&A with Asustek CEO Jerry Shen

    Mobile + telecom | 4h 4min ago

View more
Display panels for wearable devices
Taiwan server shipment forecast and industry analysis, 2015
2015 global notebook demand forecast
  • Wireless broadband developments in Southeast Asia markets

    As of 2013, the 10 ASEAN nations had a total of over 700 million mobile subscriptions, with the CAGR from 2003-2013 reaching 24%. This Digitimes Research Special Report analyzes the various mobile broadband markets in ASEAN and looks at the respective trends in 4G LTE development for those markets.

  • 2015 global tablet demand forecast

    This Digitimes Research Special Report provides a 2015 forecast for the global tablet market and analyzes the strategies of key market players such as Google, Apple, Intel, and Microsoft.

  • 2015 China smartphone panel trend forecast

    This Digitimes Research Special Report analyzes the strategies of key China-based major panel makers BOE, Tianma and IVO for attacking the different market segments through technology and pricing, and their relationship to local vendors Huawei, Lenovo, ZTE, Xiaomi and Coolpad.