DRAM Market to Slow in 2005

In 2004, the Corporate IT spending and PC replacement markets finally broke the economic chains that bound them.

Phoenix, Arizona April 11, 2005 - Computing continues to be the market with the most impact on the DRAM segment, especially DRAM modules. New technology drivers from the server and high-end communication segment include registered DIMMs with higher density capacity. While computers are and will remain the main consumers of modules ringing in over 80% of the megabits in 2004, the increasing need to transmit larger packets of data has upped the memory requirements. Semico expects more applications to incorporate modules such as arcade machines, kiosks, and gambling machines.

“In 2004, the module market had a great year. As more electronic devices that use DRAM are put into production, the consumer purchaser will be an even larger contributor, and the DRAM industry is also destined for more diversification,” said Sherry Garber, Senior Vice President of Semico Research Corp. “With close to 90% of the DRAM megabits implemented in modules, the health of the module market remains tied to the overall health of the DRAM industry.”

So what sparked the upward trend seen in 2004 and what does the future hold? The Corporate IT spending and PC replacements finally broke the economic chains that bound them. Unlike the year before, where the remaining Corporate IT professionals continued to eke out the last bit of life remaining in the much-maligned installed corporate PC base, new PC sales were up. With the improved economic conditions, IT spending grew significantly in 2004.

Since corporations base their next year’s IT spending budgets on the current economic conditions, one would think that 2005 may even be a better year. However, Semico predicts a 3.0% drop in revenue for the DRAM industry. Many computers have been upgraded this past year with new DRAM memory, and many new systems were already sold. As a result, DRAM demand will not be as strong in 2005 as in 2004. Combined with the cyclical nature of the DRAM industry, this will result in a down year.

As the DRAM industry stabilizes, Semico does envision huge growth as was the case in 2004. 2005, as mentioned before, will be a down year, with 2006 picking up about 2.6%. Semico forecasts sustained revenue CAGR of 6.3% from 2005-2009.

This study is available for immediate delivery for $3500. To purchase, please contact Jim Feldhan at 602-997-0337 or jimf@semico.com, please reference report number VM102-05.

About Semico

Semico Research Corp is a marketing and consulting research company located in Phoenix, Arizona. Semico was founded in 1994 by a group of semiconductor industry experts. We have improved the validity of semiconductor product forecasts via technology roadmaps in end-use markets.

Semico Research
Phoenix, Arizona
T: 1 602 997 0337
www.semico.com