Mon, Sep 17, 2012 - Page 13 News List

DRAM oversupply to persist next year, analysts say

By Kevin Chen  /  Staff reporter

The oversupply in the global DRAM market will persist next year, despite having improved this year from last year, market researcher TrendForce Corp (集邦科技) said last week.

The Taipei-based researcher attributed the persistent oversupply in the market to the lack of “a unified effort” among the world’s three major DRAM makers in implementing production cuts or utilizing the right product mix.

The “big three” refers to Samsung Electronics Co, Hynix Semiconductor Inc and Micron Technology Inc, as Micron’s US$2.5 billion takeover of the bankrupt Japanese memorychip maker Elpida Memory Inc is expected to go through early next year.

“Even if Micron and Elpida were to combine their production capacities during the first quarter of next year, the DRAM market supply will still likely exceed demand by about 7 percent,” TrendForce said in a report issued on Thursday.

TrendForce said in the report that it expects standard memory chip supply will exceed demand by approximately 10 percent, given signs that PC memory capacity is unlikely to improve further and the launch of Windows 8 may not stimulate such a big and fast hardware transition as it has in the past.

However, with smartphones and tablets remaining popular within the market, and with high-end ultrabooks expected to begin using mobile memory chips, TrendForce said the supply-demand balance for the mobile-memory market would remain relatively stable next year, with supply only 4 percent higher than demand.

The global DRAM market has been suffering from weakening demand and a supply glut over the past few years. With prices continuing on a downtrend since July, more companies are taking the initiative to implement PC DRAM production cuts and shift more production to DRAM chips used in mobile devices and servers.

According to statistics compiled by DRAMeXchange, contract prices of DDR3 4GB memory modules declined by 18.82 percent to US$17.25 per unit in the first half of this month from a yearly high of US$21.25 amid weakening demand for PC DRAM. In addition, prices may decline further to a historical low of US$16 in the second half of this month, TrendForce forecast.

Separately, industry researcher IHS said that during the second quarter, PCs accounted for less than half of the market for DRAM chips, the first time in a generation that they did not consume the majority of the chips.

IHT added that this reflected the growth of smartphone and tablet technology during the “post-PC” era.

The researcher said PCs accounted for 49 percent of DRAM shipments last quarter, down from 50 percent in the first quarter, while mobile phones’ and tablets’ shares were 13 percent and 2.7 percent in the second quarter respectively, and are expected to increase to 20 percent and 6.9 percent by the end of next year, it added.

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