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DRAM market to lose steam in 2011?

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With a huge fall in Average Selling Prices (ASP) predicted for 2011, global dram revenue is expected to contract sharply this year according to market research firm iSuppli. Worldwide revenue in 2011 is forecast to decline to $35.5billion, down 11.8% from $40.3bn in 2010.

The double digit drop represents a stark reversal of the 77.5% increase in dram revenue in 2010 compared to 2009, despite strong growth opportunities in smart phones and tablets. The company also forecasts that the next several years will be turbulent for dram revenue, only picking up again in 2014. ASPs this year are projected to drop 44.7% to $1.44, down from $2.61, in the face of supply continuing to outpace demand. Bit growth, while expected to increase 59.6% to 24.6bn GB, is not expected to make up for the contraction in prices. The decline in dram sales will, however, bode well for consumers, says iSuppli. The price of a 2GB module is currently at less than half its level six months ago, a development expected to lead to higher dram content in pcs for 2011 and provide consumers with more memory per machine. Furthermore, the research firm believes the new predominant memory configuration in 2011 will be 4GB, to be loaded in half of all desktop pcs. Consumers can also expect the dram market to increasingly transition to newer ddr3 modules, which boast faster transfer speeds and consume less power than ddr2.