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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (8351)	12/18/2003 8:05:28 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

DRAM market faces two good years, says researcher by Anthony Gonsalves, Techweb News Silicon Strategies 12/18/2003, 6:07 AM ET The market for DRAM chips is expected to remain strong for the next couple of years, a market research firm said Wednesday (December 17, 2003). It is forecast to increase from $16.5 billion in revenue in 2003 to reach $24.7 billion in 2007, International Data Corp. said. However, after two good years the revenue is predicted to decrease in 2006 and 2007 because of an expected oversupply. "The market for DRAM has been recovering over the course of 2003. Prior to that, there was some recovery, but it had been very choppy -- sometimes up, sometimes down," IDC analyst Shane Rau said. "(But) over the next couple of years, there will be a significant recovery in growth, so the market should be fairly healthy in 2004 and 2005." Beyond that, the market is expected to decline because of regular business cycles, such as PC replacements, Rau said. Organizations are expected to replace their older PCs over the next two years, which means the buying cycle will slow considerably after 2005 and possibly contribute to an oversupply of chips. Computers are the biggest users of DRAM, although the chips are used in cellular phones and other handheld devices that are being used to run applications. The growth rate in DRAM use will be much higher in handheld devices than in PCs, since the former is essentially starting from zero. "They will be a major factor in the market, but probably never competing with PCs in terms of the total quantity of DRAM consumed," Rau said. Over the next several years one or two more DRAM manufacturers are expected to drop out of the business, Rau said. Currently, there are five companies that control as much as 90 percent of the market, with the rest covered by about a half dozen minor players. In the most recent economic downturn, some chip manufacturers were forced to cut prices below costs in order to move product. "When these suppliers compete with each other, it becomes a war of attrition, a race to the bottom," Rau said.