Analysts with Semico Research have identified a
major sea change in the way the memory market works. According to a
Semico report released this week, DRAM demand, and not DRAM
capacity, now determines how much memory will be shipped during any
given quarter, while the growing popularity of NAND flash due to
its inclusion in products like Apple's iPhone is having a direct
impact on that demand.
The firm said that the strongest evidence of this shift is in
the
price collapse seen in the first half of the year. According to
Semico, even if DRAM capacity remains exactly flat for the
remainder of 2007, DRAM bit growth will still achieve the highest
growth rate in a whopping seven years; quarter-to-quarter bit
growth has seen 20 percent boosts during the past two quarters, the
firm said.
The fact that the industry suffered a major pricing decline
regardless of this upped capacity indicates that OEM demand
determines the memory's bottom line: how much gets shipped, and for
how much it gets purchased.
Another sign of the memory market's changing face is the ascent
of NAND as a high volume commodity memory product, Semico said.
"Because of the manufacturing similarities between NAND and DRAM ,
some memory manufacturers have the option of shifting enough
resources between the two products to impact the total production,"
the firm reported.
"The second half of 2007 clearly establishes that the analysis of
DRAM supply and demand can no longer be separated from a
coordinated and linked analysis of NAND conditions," Bob Merritt,
VP of DRAM at Semico, said in a statement. "The demand and
production ramp for
NAND in iPhones is now directly linked to the DRAM cost and
availability for Vista ."
One impact from the new environment can be seen immediately:
according to Semico, DRAM capacity is building in the supply
channels now in anticipation of tighter DRAM supply in Q4. Another
impact is the adjustment of foundry's capital expenditures, which
now have to consider the growth rate of both DRAM and NAND
applications.
By Colleen Taylor, Contributing Editor - Electronic News