DRAM market to fall in 2006
EE Times
(12/13/2005 10:31 AM EST)
SAN JOSE, Calif. — Market research firm iSuppli Corp. predicts that the DRAM market will suffer in the fourth quarter of 2005, with a slight downturn projected in 2006.
Global DRAM sales are expected to decline to $23.97 billion in 2006, down 5.1 percent from $25.25 billion in 2005, according to iSuppli. However, DRAM market revenue is expected to rebound in 2007, rising 12 percent to reach $26.8 billion, according to the firm.
Meanwhile, the DRAM market is ending on a sour note in 2005. During the fourth quarter, prices for 256- and 512-Mbit Double Data Rate (DDR) SDRAM have decreased by about 20 percent, according to iSuppli.
iSuppli is cautiously predicting that prices will remain on the decline through the end of 2005, before a slight rebound occurs in the first quarter of 2006.
Prices will strengthen due to slowing bit production growth among DRAM suppliers. DRAM bit production is expected to grow by only about 10 percent in 2005, compared to 62 percent in 2004, iSuppli predicts.
Many DRAM suppliers already are selling parts at prices below their manufacturing costs, and thus are holding the line on further production hikes and price cuts. Furthermore, leading DRAM suppliers Samsung Electronics Co. Ltd. and Hynix Semiconductor Inc. have become more aggressive in their efforts to convert their fabs from making DRAM to producing a more lucrative product: NAND-type flash memory.
While prices are expected to strengthen in the first quarter, the overall outlook for 2006 appears less positive.
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