DRAM Revenue On Track For Record Growth - InformationWeek

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Infrastructure // PC & Servers

DRAM Revenue On Track For Record Growth

Global revenue from DRAM, the system memory primarily used in computers, soared by nearly 182% in the first quarter, reaching the third-highest quarterly level in 11 years, a market research firm says.

DRAM revenue in the quarter rose to $9.5 billion from $3.4 billion in the same period a year ago, which was at the height of the economic recession that pummeled PC sales, iSuppli reported Monday. Compared to the fourth quarter of 2009, DRAM revenue use by 9.7%.

"Both DRAM shipments and average selling prices surged in the first quarter due to stronger-than-anticipated demand for PCs and tight supplies," iSuppli analyst Mike Howard said in a statement. "It doesn’t take a math genius to figure out that the combination of larger shipments and higher prices results in rising revenue for the DRAM market."

The near record performance bodes well for the rest of the year, which could become the industry's "greatest year in history," Howard said. Only two other quarters during the last 11 years have achieved higher revenue: the fourth quarter of 2006 at $10.7 billion and the first quarter of 2007 at $9.7 billion.

The first quarter is typically the weakest period of the year for DRAM revenue, as sales and prices decline following the strong PC buying season in the fourth quarter, which includes the holiday shopping season.

During the last 20 years, DRAM prices in the first quarter typically fell an average of 14.7% compared to the previous quarter, iSuppli said. But in the first quarter this year, prices rose 2.9%.

Several factors point to the possibility of the best year ever for the DRAM industry. First, DRAM prices have maintained their upward momentum in the second quarter, due to supply shortages. Demand is expected to continue to exceed supply in the second half of the year, further boosting prices.

"The question is no longer if 2010 will be a great year for DRAM -- but rather if 2010 will be the greatest year for DRAM," Howard said.

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