Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
?
EE Times-Asia > Memory/Storage
?
?
Memory/Storage??

DRAM market growth to abate, analysts agree

Posted: 20 Sep 2004 ?? ?Print Version ?Bookmark and Share

Keywords:dram? gartner dataquest? infineon? nanya? elpida?

With another sharp downturn expected within two years, the historically cyclical DRAM industry is grappling with vastly slower market growth rates that promise to change the sector's landscape in the coming years, panelists and an analyst suggested Sept. 13 at a two-day Gartner Dataquest conference here.

"In the lower megabyte growth environment, vendor strategies are changing: gaining DRAM market at all costs is no longer a viable option if it ever was," said Gartner Dataquest market analyst Andrew Norwood. "Vendors are having to diversify into other product areas and focus more on revenue or profit per wafer for business success."

The sector's historical annual bit growth of 70 percent against an annual cost decline of 32 percent had given long-term annual market growth of 15 percent, Norwood noted. "As bit growth slows, so will long-term revenue growth, possibly to 3 percent," he said, adding, "Long term, 47.2 percent bit growth equals zero percent market growth."

The mid-term problem for DRAM vendors is 2006, where Norwood is forecasting a revenue recession of 31 percent, with growth returning in 2007 and 2008. The slow down actually begins later this year and into next year as new capacity comes online. Indeed some players are aggressive ramping new production. Infineon, Nanya, Elpida and Powerchip are increasing capacity through Q4 2005 to anywhere from 165 percent to nearly 300 percent, Norwood estimated.

"They're trying to gain market share in DRAMs by adding capacity," he said.

So what's a DRAM vendor to do as slower growth descends on its industry?

Michael Sadler, vice president of worldwide sales for U.S. memory maker Micron Technology Inc., said during a panel session that the key is to find new markets.

"Today, PCs are a mature market," he said. "What we're doing now is we're deploying capital to develop and bring products to market that deliver maximum contribution margin, rather than solely reducing cost per bit. That doesn't mean reducing cost per bit isn't important."

Micron and Hynix are investing in the NAND flash business to try to capture some revenue in data storage. Nanya, however, said it is not. "We're trying to stabilize and grow our DRAM business," said Ken Hurley, president of Nanya Technology. "That type of diversification is not in our best interests," Hurley said.

- Brian Fuller

EE Times





Article Comments - DRAM market growth to abate, analyst...
Comments:??
*? You can enter [0] more charecters.
*Verify code:
?
?
Webinars

Seminars

Visit Asia Webinars to learn about the latest in technology and get practical design tips.

?
?
Back to Top