DRAM market: On the road to recovery

El Segundo, Calif. — Global DRAM revenue rose 35 percent in the third quarter compared to the second quarter, according to a preliminary estimate from iSuppli Corp. This follows a 34 percent increase in the second quarter, said the market researcher.

The DRAM industry in the second and third quarters of 2009 posted the strongest sequential growth in revenue and pricing seen in at least five years, indicating that the recent market rebound is real and is likely to continue into 2010, according to iSuppli.

The report, DRAM Recovery is No Mirage, indicates the revenue rise in the second quarter ended a three-quarter losing streak that began in the third quarter of 2008. Revenue had fallen by 19 percent in the first quarter of 2009, plunged by 38 percent in the fourth quarter of 2008 and decreased by a moderate 1 percent in the third quarter of 2008.

Global DRAM average selling prices (ASPs) rose by 21 percent in the third quarter compared to the second, following a 19 percent rise in the second quarter, which indicates the DRAM market is emerging from a long slump, said Mike Howard, senior analyst, DRAM, for iSuppli. Pricing declined by 10 percent in the first quarter of 2009. The second quarter marked the first sequential increase in DRAM pricing since the fourth quarter of 2006.


Despite the strong recovery in the second and third quarters, extremely weak conditions in the first quarter mean that global DRAM market revenue is set to decrease by 12.9 percent in 2009, according to iSuppli’s preliminary estimate.

Howard said third-quarter earnings from Samsung, Micron and Taiwanese DRAM manufacturers indicate increasing sales and further progress toward profitability. Together, the five Taiwanese DRAM suppliers — Inotera, Nanya, Powerchip, ProMOS and Winbond — increased revenue by 15 percent per month for the last three months, he said.

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