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iSuppli: DRAM rebound will continue to 2010

Posted: 28 Oct 2009 ?? ?Print Version ?Bookmark and Share

Keywords:DRAM? market recovery revenue? pricing? market report?

The DRAM industry in the second and third quarters of 2009 posted the strongest sequential growth in revenue and pricing seen in at least five years. This is according to an iSuppli report, which stated that the growth indicates that the recent market rebound is real and is likely to continue into 2010, the market watcher added.

Global DRAM revenue rose by 35 percent in Q3 compared to Q2, according to a preliminary estimate from iSuppli. This follows a 34 percent increase in Q2.

The revenue rise in Q2 09 brought an end to a three-quarter losing streak that began in the Q3 08. Revenue had fallen by 19 percent in Q1 09, plunged by 38 percent in Q4 08 and decreased by a moderate 1 percent in Q3 08.

Meanwhile, global DRAM average selling prices rose by 21 percent in Q3 09 compared to Q2 09, following a 19 percent rise in the Q2 09. Pricing declined by 10 percent in Q1 09. Q2 09 marked the first sequential increase in DRAM pricing since Q4 06.

"Third-quarter results from major suppliers show that the DRAM industry recovery is no mirage," said Mike Howard, senior analyst, DRAM, for iSuppli. "The continued increase in prices comes as another indicator that the DRAM market is emerging from what has been a long and painful slump."

The global DRAM market has been declining on an annual basis since 2007. Revenue decreased by 7.5 percent in 2007 and plunged by 25.1 percent in 2008. Despite the strong recovery in Q2 09 and Q3 09, extremely weak conditions in Q1 09 mean that global DRAM market revenue is set to decrease by 12.9 percent in 2009, according to iSuppli's preliminary estimate.

The market's strong performance in Q2 09 and Q3 09 likely presage continued strength in the DRAM market.

"Third-quarter earnings from Samsung, Micron and the Taiwanese DRAM manufacturers point to increasing sales and further progress toward profitability," Howard said. "Samsung achieved profitability during the third quarter, while Micron's results indicate the company is on its way back to the black. Recent sales results from the Taiwanese DRAM companies are also positive for DRAM. Collectively, the five Taiwanese DRAM suppliersInotera, Nanya, Powerchip, ProMOS and Winbondsaw monthly revenues increase rise by 15 percent per month for the last three months."

iSuppli expects supply levels to remain fairly consistent in Q4 09. DRAM demand is expected to improve in 2010 in concert with the general global economic recovery.

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