DRAM Set to Get More Expensive in the Next Three Years – Analysts

DRAM Industry Enters Positive Circle and Profit For the Next Three Years

by Anton Shilov
03/26/2010 | 11:05 PM

With the fact of limited capacity expansion, the cost of advanced immersion scanners and difficulties with the transition to manufacturing processes below 40nm, dynamic random access memory (DRAM) supply bit growth will be limited in 2010 to 2012, according to market research firm DRAMeXchange. But there is a good news for actual memory makers: the price for DRAM is not expected to drop in the next three years.

 

Global economy has recovered since the second half that and even IMF has predicted 2010 worlwide GDP growth from 3.1% to 3.9%.

DRAMeXchange also expects the new Microsoft Windows 7 to play an the important role in consumer and corporate PC replacement which is likely to boost year-on-year PC market growth to be 12% -17% in the next 3 years.

DRAMeXchange identifies DRAM industry cycle by about 3 years. According to the company’s analysis, DRAM vendors experienced continuous losses in 2001-2003 and consecutive profit from 2004 to 2006, followed by another decline from 2007 to 2009. In 2010, DRAM vendors are set to start to turn to profit and enter another profit cycle. Given the recovering global economy, corporate replacement and consumer stimulation by Windows 7 and other factors DRAMeXchange expects DRAM industry likely enter another positive cycle with anticipated profit in the next 3 years.

There is a problem, though, costly immersion scanners are required for 50nm and below technology migration. Besides DRAM industry, other semiconductor vendors such as TSMC and UMC will also need immersion scanners on technology migration. ASML, a supplier of immersion scanner, has occupied above 90% market share accordingly. With the full utilization status, the time table for delivery becomes uncertain and this situation may delay the technology migration for DRAM vendors.  

As for fabrication technology process transition, Samsung is the only vendor can achieve 40nm-class technology in terms of mass production, whreas Hynix and Elpida will do so only in the second quarter of 2010.

DRAMeXchange predicts DRAM supply bit growth rate will be merely 40% given the limited capacity expansion and difficulties associated with transition to new manufacturing processes below 40nm.