Chip demand rising, DRAM and Flash prices plunge

Memory products remain the major concern of the chip industry. Excluding memory products, the industry would have grown by 12% in H1. The SIA said that price attrition in memory products contributed to a 6% year-on-year decline in total memory sales despite sharply increased unit sales.

“Advances in semiconductor technology continue to deliver huge benefits to consumers, as semiconductor devices deliver higher performance and increased functionality at lower cost,” said George Scalise, president of the SIA. “At the same time, rapid price declines for microchips tend to mask the real growth of the industry. The cost of 1 Gb of DRAM has declined by 43% during the past year, while the price of 2 Gb of NAND flash has declined by 61% in the last 12 months. Lower prices enable increased memory content in consumer devices. Micron estimates that the memory content of the average PC will increase at least 50% this year, while the memory content in the average cell phone will increase by more than 150%.”

Of course, the dramatic situation in the DRAM and Flash memory industry means that consumers will be able to purchase memory for much lower prices. And a recovery of the segments isn’t expected to arrive anytime soon. Market research firm iSuppli said that “the global DRAM market is showing renewed signs of weakness, with prices expected to fall during the third quarter due to bloated inventories.” The firm said that “OEM contract prices for DRAM likely to decline in August and September.”