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Analysts see DDR3 SDRAM shortages

Posted: 03 Aug 2009 ?? ?Print Version ?Bookmark and Share

Keywords:SDRAM? memory shortage? DRAM?

Don't look now but market analysts are forecasting DDR3 and DDR2 SDRAM shortages.

"DDR3 supply is tight," said VLSI Research CEO G. Dan Hutcheson. "Prices are up because of the tight supply."

Another research firm, iSuppli Corp., predicts the DDR3 shortages will persist during Q3, because suppliers can't meet current demand. "While the limited investment of DRAM suppliers is slowing their 50nm migrationa process necessary to ramp up DDR3 production quicklythe DDR3 shortage will cause supplies of DDR2 to tighten as tier-one suppliers continue to convert production from DDR2 to DDR3."

Amid a shortage of DDR3 memory, iSuppli has upgraded its rating of near-term conditions for DRAM suppliers to positive. iSuppli 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 revenue dropping to $23.6 billion in 2008, down from $34 billion in 2006," Kim said.

During this period, the profitability of DRAM suppliers evaporated completely, and the combined operating loss for the entire DRAM industry amounted to $15 billion during the last three years.

DRAM revenue plunged by 19.5 percent in Q1 compared to Q4 08. However, with the rise in DRAM pricing, revenue increased by 37.5 percent in the second quarter compared to the first. Revenue is set to continue to rise on a sequential basis by more than 20 percent each in the third and fourth quarters.

iSuppli Worldwide DRAM Revenue Forecast (Click on image to enlarge.)

- Mark LaPedus
EE Times

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