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Naysayers, optimists clash on DRAM forecasts

Posted: 11 Aug 2010 ?? ?Print Version ?Bookmark and Share


Industry players and watchers have conflicting outlooks when it comes to forecasting DRAM supply and demand. The optimists say that the bullish trend will continue and would only be slowed a bit by a dearth in fab equipment and capital investment. On the other hand, pessimists say that the boom is indeed over.

As reported, ASML Holding NV and Nikon Corp. are unable to keep up with huge demand for their respective 193nm immersion lithography scanners for advanced DRAM production.

DRAM makers also failed to invest in new capital in recent cycles. As a result of this and other trends, overall DRAM bit growth projected for 2010 could come in from 2 to 4 percentage points lower than expected. This could reduce the projected annualized DRAM growth rate from 49 percent to as low as 45 percent, warned iSuppli Corp. in a new report.

Some are pessimistic in the short term. ''In fact, two-thirds of current (fab capacity) plans are centered on memories. The problem is dominantly in DRAMs, where as recently as May, everyone thought the consolidation would limit over-expansion. In less than one quarter, we have gone from a window of endless shortages to excess,'' said G. Dan Hutcheson, CEO of VLSI Research Inc., in a recent report.

Others disagreed. "We believe the DRAM cycle has a ways to go due to the enterprise upgrade cycle (these last few years, not quarters), and DRAM cycles are currently muted (more predictable supply growth and average selling price stability) unlike in the 80s and 90s," said Hans Mosesmann, an analyst with Raymond James & Associates.

"DRAM players are seeing 13 to 15 percent bit demand growth in Q3 2010 and an expectation of similar quarter/quarter growth in Q4 2010. Some OEMs are indicating 100-plus percent bit growth in 2011, which is obviously not an indication of overall bit demand growth but rather an indication that in enterprise-centric applications (servers) the new Intel Nehalem CPU architecture requires significantly more DRAM," Mosesmann said.

"A commodity profoundly susceptible to the variable dynamics of supply and demand, DRAM is expected to ship 15.9 million 1Gb-equivalent units in 2010, up 48.6 percent from 10.7 million units last year," added Mike Howard, senior analyst for DRAM at iSuppli.

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