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DRAM sales expected to rise 40 percent this year

Posted on Friday, February 19 2010 @ 13:38:49 CET by

iSuppli analysts predict the global DRAM market will see a 40.4 percent growth in revenue this year, bringing an end to three consecutive years of decline. The research firm estimates DRAM revenue will total $31.9 billion this year, following declines of 3.7 percent in 2009, 25.1 percent in 2008 and 7.5 percent in 2007.
“This year will build on the momentum built up in the fourth quarter of 2009, when overall industry revenue increased by 40 percent sequentially,” said Mike Howard, senior analyst for DRAM at iSuppli. Increased bit shipments combined with higher Average Selling Prices (ASPs) were the main factors driving the robust growth. ASPs climbed by 16 percent and bit shipments rose by 21 percent. The result was revenue of $8.5 billion in revenue in the fourth quarter.”

The fourth quarter of 2009 represented the best period for DRAM suppliers in recent memory, with the industry posting revenue of more than $8 billion for the first time since the first quarter of 2007, according to iSuppli Corp.

Even more impressive is that this strong revenue performance came after the disastrous first quarter of 2009, the worst quarter on record for DRAM since the Internet bubble crash in 2001.

Historically, when the DRAM market has experienced fast growth period during a quarter, subsequent quarters have seen revenue growth and ASPs fall to extremely low levels. However, current market conditions indicate such a downturn is unlikely.

“iSuppli believes that the DRAM market’s strong performance in the fourth quarter will not presage a downturn, such as what occurred when the Internet bubble burst in 2001,” Howard said. “However, conditions in 2010 are radically different from 2001 when the Internet bubble burst and capital spending explosion resulted in unsustainable growth. Instead, iSuppli foresees a period where the DRAM industry will see solid revenue and steady profits as DRAM suppliers have done a good job managing manufacturing capacity.”

Elpida was the darling of the fourth quarter, with revenue of $1.7 billion, up 64 percent from the third quarter. The company also turned a profit of $230 million, the first time the company has been in the black on a quarterly basis since 2007. Elpida achieved this feat by attaining higher-than average bit growth of 30 percent as well as an ASP appreciation of 26 percent.

But it wasn’t just Elpida; Micron also saw its DRAM revenue swell by 50 percent compared to the third quarter. Hynix was up by 42 percent and Samsung rose by 25 percent.



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