PCs still gobble up lion’s share of DRAM supply

Industry players agree that several key markets including smart phones, tablets and servers are driving DRAM demand this year. Although tablets are considered the “sexy” part of demand, with the highest growth rate, it’s still a small portion of the DRAM market.

In the context of the overall DRAM market, tablets consume only 20 percent of the total market, said Mike Howard, principal analyst for DRAM and memory, IHS iSuppli in El Segundo, Calif. “There is still this huge segment called PCs — laptops, desktops and servers — that consumes 60 percent of the bits, but tablets are where the growth is within DRAM. It’s where all the new devices are coming from.”

“We think the PC segment is a slowly shrinking portion of the market but even in our five-year forecast it’s still 55 to 60 percent of the market,” Howard said.

Howard says to look to laptops for growth. Just as a form factor it has outshipped desktops for about 12 to 18 months and it continues to grow where desktops are a flat segment.

They also are all using DDR3 DRAM, which has outshipped DDR2 on a bit basis starting in the first two quarters of last year, followed by a price crossover in the third and fourth quarters, Howard said.

“DDR3 is the cheapest bit out there now and that’s where all of the lithographic shrink attention is being paid by the manufacturers,” Howard said.

Thanks to cloud computing and virtualization there is also big demand for DRAMs in the server market.

On the server market, particularly in the data center, Samsung sees “huge growth” because of the proliferation of cloud computing, but also sees growth on the mobile side for smart phones and tablets, said Pablo Temprano, director, Memory Product Marketing, at Samsung Semiconductor, Inc. “That growth is really driving high demand for DRAM.”


“PC demand is a big driving factor for DRAM, but whether we get it from a server, tablet, notebook, smart phone or desktop we have a home for our bits [DRAM], said Temprano.

“Most memory suppliers are trying to manage their product mix between mobile memory for smart phones and tablets, registered DIMMs (RDIMMs) for servers and small-outline DIMMs (SODIMMs) and unbuffered DIMMs (UDIMMs) for PCs and even graphics memory for video cards and gaming consoles, said Temprano.

“The good news for Samsung is that we have a very strong product mix and a one-stop shop,” he added.

Samsung holds the biggest share of the DRAM market. DRAM revenue for Samsung in the fourth quarter of 2010 totaled $3.6 billion, tallying a 41.7 percent share of the $8.7 billion market, according to IHS iSuppli.

And despite a revenue drop in the fourth quarter, also shared by all DRAM companies, Samsung’s share rose 1 percentage point compared to the third quarter, when the total market revenue reached $10.7 billion, according to IHS iSuppli. The revenue decline was the result of average selling prices (ASPs) falling more than 28 percent in the fourth quarter.

The closest competitor, Hynix Semiconductor, at No. 2, has held approximately 22.0 percent market share for eight consecutive quarters, said the market researcher. Elpida Memory Inc., ranked No. 3, suffered the biggest drop in revenue in the fourth quarter, down 35 percent to $1.1 billion and a 13.0 percent share.

Another fourth quarter winner cited by IHS includes Micron Technology Inc., ranked No. 4, whose revenue fell only 3 percent for the period. The market researcher attributes this to significant shipments being counted from its stake in Taiwan’s Inotera Memories. Micron held a 12.5 percent market share in the fourth quarter, up from 10.5 percent in the third quarter.

Nanya, like Micron, takes shipments from its stake in Inotera, and Elpida brands DRAM made by rival Powerchip as its own, said IHS iSuppli.