Date: 17/01/2011

iSuppli forecasts a fall of 11.8% in worldwide DRAM revenue in 2011

iSuppli forecasts worldwide DRAM revenue in 2011 to decline to $35.5 billion, down 11.8 percent from $40.3 billion in 2010. The double-digit drop represents a stark reversal of the 77.5 percent increase in DRAM revenue in 2010 compared to 2009, says iSuppli. The next several years after 2011 also will be turbulent for DRAM revenue as revenue heads down in the face of ever-declining ASPs, predicts iSuppli.

"After the boom year of 2010, the DRAM market is waking up to 2011 with a hangover," said Mike Howard, senior analyst for DRAM and memory at IHS . "With supply exceeding demand, pricing will decline precipitously for the year, causing revenue to decrease."

The ASPs started falling in third quarter of 2010 turning the growth curve downwards, which was going upwards from the mid 2009.

The reversal of fortune will extend to 2011, according to IHS iSuppli forecasts. As per iSuppli the ASP this year is projected to drop 44.7 percent to $1.44, down from $2.61 in 2010. Bit growth, while expected to increase 59.6 percent to 24.6 billion gigabytes (GB), will not make up for the brutal contraction in prices.

"While bad news for suppliers, the retreat in the DRAM ASP augurs well for consumers," Howard said. "The price of a 2GB module currently is less than half its level six months ago, a development sure to lead to higher DRAM content in PCs for 2011 and provide consumers with more memory per machine. Furthermore, the new predominant memory configuration in 2011 will be 4GB, to be loaded in half of all desktop PCs, with 2GB systems declining to just 6 percent of the total market by the end of the year."

iSuppli also reports consumers also can expect the DRAM market to increasingly transition to newer double data rate 3 (DDR3) modules, which boast faster transfer speeds and consume less power than older DDR2 device types. While DDR2 will continue to be found in many consumer electronics devices such as TVs, nearly all PCs shipped in 2011 will ship with DDR3.

iSuppli also notes the new trend where it says memory content for smart phones in 2011 will increase at a substantial rate of 62 percent, nearly doubling the 33 percent growth projected in PCs. iSuppli forecasts tablet shipments will grow rapidly this year to 57 million units, compared to 16 million in 2010-and then become a significant DRAM category rivaling smart phones in 2012 and 2013. By 2014, mobile DRAM will account for 16.5 percent of all DRAM bits that are shipped-a dramatic increase from just 6.2 percent in 2009, adds iSuppli.