20 January 2012

DRAM revenue set for six year low warns IHS

Companies operating in the DRAM space are being warned to be prepared as 2012 revenue could be set to dip to a six year low, according to IHS isuppli.

The market analyst says that 2012 dynamic random access memory revenue will amount to $24.4billion, down 16% from $29.1bn last year. Though the drop this year is less than the 27% decline of 2011, the fall in revenue is described by IHS as 'no less encouraging'.

IHS adds that as the world's economy gradually strengthens, the market will recover, with revenue by 2015 returning to where it was in 2010 – approximately $40bn.

The analyst attributes the fall in DRAM revenue to factors such as the persistent European debt crisis and an unsteady global economic recovery. Mike Howard, analyst at IHS, said: "Much of the industry's fortune also is beyond its control to be sure – demonstrated by the recent flood in Thailand affecting the storage industry to which the DRAM space is closely allied; or by the subsequent reduction of pc shipments following the emergence of tablet devices like Apple's iPad, denting DRAM's previously large footprint.

"While the majority of DRAM players have managed to survive, it appears unwise for any company to keep relying on the vagaries of good fortune or to count on the failure of others for their own success. Except for Samsung, nothing is guaranteed in 2012 - and beyond. Instead, resolve, discipline and a laser focus are what will guide each company through the difficult year ahead, IHS believes."

Chris Shaw

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