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DRAM Capacity: Return of Boom and Bust?

Phoenix, Arizona March 27, 2008 - The combined Supply and Demand of DRAM and NAND drive the prices for both. Semico introduces Memory Reports that highlight the impact of the new relationship between DRAM and NAND supply and demand.

Many DRAM manufacturers were initially attracted to NAND technology because of the similarities of NAND and DRAM manufacturing processes. More than 50% of total Memory revenue is from companies participating in both DRAM and NAND markets. Of the $58B total 2007 memory revenue, $45B was contributed by DRAM and NAND.

In the first of two reports, the DRAM market is examined in detail to establish a baseline of manufacturing and technology. Comparisons and contracts to the NAND Flash market are included.

The growth in DRAM and NAND memory bits is the result of the transition away from desktop personal computers and toward mobile personal computing. As the primary target application changed, the value proposition of the supporting memory technologies also changed. The rapid growth of NAND now represents an alternative high volume product for memory manufacturers, and the allocation of corporate resources between the two similar manufacturing processes can alter the rates of production of either of the two memory technologies. Applications still drive the demand.

Excess wafer capacity identified in the 2006 capacity report enabled Semico to correctly forecast the plummet of 512Mb prices in 2007.

Report 2: Memory Wafer Demand and Capacity: Stability or Chaos Ahead? Analysis will be available in 1Q08.

Are NAND and DRAM demand counter-cyclical enough to provide stability in 2008 or do those separate demand cycles merge in 2008 to pull NAND into the existing DRAM boom-and-bust cycle? Semico’s analytical approach of combining both DRAM and NAND trends provides a unique overview. A proprietary model ties Semico’s component forecasts for these two critical technologies directly to the wafer demand. Sensitivity analysis techniques are applied to determine the impact of market-driven variables, such as unanticipated challenges in migration beyond 65nm, combined with rapid growth in new applications. Completing this overview are projected capital expenditures and planned 300mm wafer capacity for major companies.

About Semico

Technology manufacturers, vendors, service providers, technology professionals and market specialists worldwide, utilize Semico’s experienced staff and in-depth research to support critical business, product and technology decisions. Semico’s vision is derived from both a deep technology understanding and comprehensive research, which examines each segment of the supply chain for each market. Regular and ongoing end-user demand and primary research surveys are the foundation of the analysis, enabling Semico to provide insightful market analysis and guidance on future market opportunities.

Semico is a strategic partner with leading technology companies, with access to an extensive worldwide electronic network, technology databases and expert personnel. Semico was founded in 1994 by a group of semiconductor industry experts and has offices in Phoenix, California, New York, Japan and Taiwan.