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Memory fever: DRAM is hot, NAND is not

Posted: 13 May 2010 ?? ?Print Version ?Bookmark and Share

Keywords:DRAM? NAND? memory market?

The current climate indicates that DRAMs are hot. NAND flash is not.

Many DRAM parts are on allocation now, according to iSuppli Corp. Plus, during the first three months of 2010, global DRAM sales exceeded the total for the initial six months of 2009, according to iSuppli.

And DRAM pricing rose in Q1 10 compared to Q4 09, according to the firm. On the other hand, NAND prices are falling, according to Gartner Inc.

On the DRAM side, worldwide DRAM revenue in the first quarter of 2010 neared $9.5 billion, up 9.7 percent from $8.7 billion from the fourth quarter of 2009, and up 181.6 percent from $3.4 billion in the first quarter of 2009, according to iSuppli.

"Both DRAM shipments and average selling prices (ASPs) surged in the first quarter due to stronger-than-anticipated demand for PCs and tight supplies," said Mike Howard, senior analyst for DRAM at iSuppli, in a statement. "It doesn't take a math genius to figure out that the combination of larger shipments and higher prices results in rising revenue for the DRAM market. This strong performance bodes well for continued growth in 2010, possibly paving the way for the industry's greatest year in history."

Others have a slightly different view. "Last week's spot pricing was down or, at best, stable, continuing the trend from the previous week. DDR3 pricing remained firm, while DDR2 pricing saw declines between 2 percent and 4 percent," said Andrew Norwood, an analyst with Gartner, in a report.

"While demand remains light in the market, brokers and distributors are liquidating their inventory and realizing profits on stock that was purchased at a lower cost base," he said. "Average spot pricing across all densities and technologies was down 1.5 percent (last week) compared with the previous week, standing at $2.81 on a 1Gbit equivalent basis."

Still, it's a slightly different story for NAND. There is demand, but last week, "NAND spot prices slipped again, as buyers remain cautious of large volume purchases, given uncertainty in the pricing outlook," said Joseph Unsworth, an analyst with Gartner, in a report.

"While all device types saw some marginal level of price erosion, current pricing levels remain high when compared with historic lows. On a weighted 1Gbyte average, current spot prices stand at $1.57, which represents considerable price erosion from a year ago, when prices in early May 2009 stood at $2.36," he said.

"However, the industry has yet to reach the record lows of early December 2008, when pricing bottomed at a disastrous 90 cents on a weighted 1Gbyte average," he said. "Nearly 18 months later, the industry has yet to reach those perilous levels, which shows how terrible the pricing environment for NAND vendors was then and, given supply constraints, how the industry has returned to profitability."

- Mark LaPedus
EE Times

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