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DRAM breaks three-quarter losing streak

Posted: 28 Oct 2009     Print Version  Bookmark and Share

Keywords:DRAM  market recovery revenue  pricing  market report 

According to iSuppli Corp. revenue and pricing in the DRAM industry posted the strongest sequential growth in at least five years, in Q3 09 and Q2 09. This proves that the recent market rebound is real and can be expected to continue into 2010.

Global DRAM revenue rose by 35 per cent in Q3 compared to Q2, according to a preliminary estimate from iSuppli. This follows a 34 per cent increase in Q2.

The revenue rise in Q2 09 brought an end to a three-quarter losing streak that began in the Q3 08. Revenue had fallen by 19 per cent in Q1 09, plunged by 38 per cent in Q4 08 and decreased by a moderate 1 per cent in Q3 08.

Meanwhile, global DRAM average selling prices rose by 21 per cent in Q3 09 compared to Q2 09, following a 19 per cent rise in the Q2 09. Pricing declined by 10 per cent in Q1 09. Q2 09 marked the first sequential increase in DRAM pricing since Q4 06.

"Third-quarter results from major suppliers show that the DRAM industry recovery is no mirage," said Mike Howard, senior analyst, DRAM, for iSuppli. "The continued increase in prices comes as another indicator that the DRAM market is emerging from what has been a long and painful slump."

The global DRAM market has been declining on an annual basis since 2007. Revenue decreased by 7.5 per cent in 2007 and plunged by 25.1 per cent in 2008. Despite the strong recovery in Q2 09 and Q3 09, extremely weak conditions in Q1 09 mean that global DRAM market revenue is set to decrease by 12.9 per cent in 2009, according to iSuppli's preliminary estimate.

The market's strong performance in Q2 09 and Q3 09 likely presage continued strength in the DRAM market.

"Third-quarter earnings from Samsung, Micron and the Taiwanese DRAM manufacturers point to increasing sales and further progress towards profitability," Howard said. "Samsung achieved profitability during the third quarter, while Micron's results indicate the company is on its way back to the black. Recent sales results from the Taiwanese DRAM companies are also positive for DRAM. Collectively, the five Taiwanese DRAM suppliers—Inotera, Nanya, Powerchip, ProMOS and Winbond—saw monthly revenues increase rise by 15 per cent per month for the last three months."

iSuppli expects supply levels to remain fairly consistent in Q4 09. DRAM demand is expected to improve in 2010 in concert with the general global economic recovery.

For more statistics and forecasts, click here.

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