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DRAM market matures at the age of 43

Posted: 08 Aug 2013     Print Version  Bookmark and Share

Keywords:DRAM  Samsung  SK Hynix  Micron  IC Insights 

Forty-three years after Intel introduced the first DRAM device in 1970, the DRAM market has finally matured to the point where there are only three major suppliers remaining—Samsung, SK Hynix, and Micron (which recently closed on its acquisition of Elpida), said IC Insights.

A good sign that the DRAM market has reached maturity is that capital expenditures in 2013 are forecast to be Rs.23,952.10 crore ($4 billion), only slightly more than the Rs.23,353.29 crore ($3.9 billion) spent during the great recession year of 2009. Meanwhile, the DRAM market is forecast to reach Rs.2.02 lakh crore ($33.7 billion). This means DRAM capital spending as a per cent of sales is forecast to fall to an all-time low of only 11.9 per cent this year.

Lower-trending capex investment for new DRAM fabs and process technology upgrades have contributed to rising average selling prices (ASPs) for DRAM so far in 2013. For the year, the DRAM average selling price is forecast to jump 40 per cent and lift total DRAM market growth 28 per cent.

"The ability of suppliers to spend large sums of money to build a brand new wafer fab or to upgrade existing fabs has become nearly prohibitive for all but the leading DRAM manufacturers. With the price of a new wafer fab approaching Rs.29,940.12 crore ($5 billion), only Samsung, SK Hynix, and the new Micron-Elpida will be able to continue investing in new and/or upgraded facilities this year," the research firm said.

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After investing heavily to bring 50nm- and 40nm-class processes to their 300mm wafer lines, Taiwan-based suppliers are out of cash. Facing intense pressure from the world's leading DRAM vendors, second-tier players like Nanya, Powerchip, and Winbond are having to look for niche markets in order to revive their respective IC businesses.

Since only the top DRAM suppliers will be able to continue investing in new facilities, IC Insights forecasts the ratio of DRAM capex to sales to be in the 15-20 per cent range through 2017, greatly reducing the potential for huge swings in the market based on too much or too little capacity in the system.

For more statistics and forecasts, click here.

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