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DRAM market consolidates and finally gains in stability, notes HIS

June 20, 2013 // Julien Happich

DRAM market consolidates and finally gains in stability, notes HIS

The global market for DRAM (dynamic random access memory) has achieved some maturity in the face of daunting challenges, allowing the industry to achieve a balance between supply and demand this year.


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After DRAM wafer output peaked in 2008 at 16.4 million 300-millimeter-equivalent wafers, production is expected to decline by 24 percent to 13.0 million this year, according to an IHS DRAM Dynamics Market Brief from information and analytics provider HIS.

The projected cut will be the second straight year of deliberate downsizing following an 8 percent drop-off last year. This year's output is expected to be slashed by 5 percent compared to 2012, as shown below.


Curtailing DRAM capacity is a positive move for the industry, resulting in a gradual normalization between supply and demand for DRAM. The industry is now believed to be perhaps slightly undersized relative to demand moving forward because of the intentional slash in output, and DRAM pricing can continue to remain firm if production remains slightly behind demand.

DRAM revenue in the first quarter rose to its highest level in nearly two years, thanks to a jump in commodity prices spurred by demand from the server PC and mobile PC segments. Pricing for the bellwether 4-gigabyte DDR3 module rose to $23 in March, up from $16 in December, an unusually large increase.

The DRAM industry has struggled with major challenges in recent years, including chronic oversupply and slowing demand from its main market, the PC business, said Mike Howard, senior principal analyst for DRAM and memory at IHS. This has led to continued weak pricing, financial losses and market revenue declines. However, the DRAM industry has entered a more mature state, enacting structural changes that will allow it to grow even in challenging market conditions.

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