DRAMs
Overall, Howard estimates
amid-30 to 40 percent year- on-year price decline for PC DRAMs compared to 2010. However, he cautioned that the DRAMmarket is highly volatile and largely driven by supply and demand and if things get tight and PC demand lifts and exceeds expectations in the second half then all bets are off.
Global DRAMShipments for Tablets (Millions of Gigabits)
4,000 3,000 2,000 1,000 0
Source: IHS iSuppli Research
During the first half of the year there will be a lot of
speculative buying because a lot of people think that the price has hit bottom, said Soni. "Even PC OEMs think they've got the lowest price that they can negotiate so they will try to buy a lotmore than what they can consume at thismoment."
As a result, pricing will be more influenced by
DRAMshipments for tablets are forecast to reach 353.3million Gbits in 2011, up 834.7 percent from37.8million in 2010
Howard says several factors could impact pricing this year
includingmajor players shifting production away fromDRAMinto more NAND production.
"Any sort of move to produce more NAND to support iPhones
and tablets could put DRAMin a slightly tighter situation so we would see prices fall less or rise in the second half," Howard said. "We don't see that as very likely but we see that as a chance of happening."
Buyers also need to keep an eye on Taiwanese
manufacturers. "If prices continue to soften there are many manufacturers in Taiwan that can throttle their output and reduce supply, bringing supply and demand back into balance," Howard said.
Other things to watch are yield challenges when shrinking to
40/30nmmode and the balance sheets of second- and third-tier manufacturers in Taiwan, Howard said.
DRAMoversupply
DRAMsuppliers and module makers agree that there currently is an oversupply in the market. "For the good part of this year, you're looking at a general
oversupply situation," said Al Soni, vice president of strategic OEM alliances for Kingston Technology Co., Fountain Valley, Calif. "The DRAMmarket has hit the bottomsince January and a recovery is not easy to come by at thismoment."
Soni also noted that Intel's recent chip recall [of the support
chip for the Sandy Bridge processor] is impacting a lot of the PC vendors' consumption of DRAMs.
18 |March 2011
speculative purchasing in the first half of 2011, Soni added. "You will see some ups and downs during the first half, not due to true demand, but instead due to OEMs buying more than they need. The market will be a little more stable during the
second half of the year." Of course, there is always a concern that demand won't be as
high as anticipated for the second half of the year so there is always a risk, althoughmany PC OEMs think it should be a relatively good year, Soni said.
"PC OEMs are expecting anywhere fromfive to 18 percent
growth but regardless at how you look at the numbers, it's not enough to eat up all the supply that's coming out," Soni added.
"PC OEMs have the right to be optimistic but there are a lot of
things in recent years that we haven't foreseen that has had a lot of impact on the way they do business, Soni said.
"For example, the currentMiddle East situationmight impact
how the economy turns out," he added. With the high expected growth in the tablet and smart phone
segments, Kingston also hasmade amajormove into the embeddedmemory space. Kingston is the leader in third-party DRAMmodules, holding nearly a 46 percentmarket share in the first half of 2010, according to IHS iSuppli.
"It's definitely a different market for us. Last year, we started
seriously getting into the embedded market with a few key solutions. The new products today like a tablet or iPhone cannot be opened so whatever memory comes with that device that's exactly what you're going to get. That's the market that's growing."
"Most likely, the PC market will continue to decline and
these types of more convenient devices like an iPad will increase in demand so we will target this type of embedded memory," Soni said.
p20
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