While the PC market is slowing as the article below discusses, the Tablet and iPad are new markets that should offer growth opportunities for both Flash NAND and DRAM.
The key reason that DRAM is slowing while NAND (and NOR) are growing faster is due to the inherent advantages of Flash vs. DRAM.
We can already see that Flash Memory Sales Surpass DRAM additional reasons were mentioned in the March 2012 article When will Flash Memory Market be 2x of DRAMs
DRAM Makers Continue to Suffer as DRAM Price Falls
4GB DDR3 DRAM Module's Price Drops to $16.25
by Anton Shilov 10/01/2012
Dynamic random access memory (DRAM) market monitoring company DRAMeXchange claims that as notebook shipments show signs of weakening and Windows 8 looks unlikely to stimulate PC shipments, second-half September contract price continues on a downtrend.
Average transaction price per 4GB DDR module fell from $17.25 to 16.25, with a low of $16, close to the lowest price reached during the second half of 2011. Average 2GB module price, on the other hand, has dropped to $9.25, a 5.13% decrease compared to the first half of the month. As 4GB modules have replaced 2GB modules as the market mainstream, 4GB price drops have become more apparent.
At press time, one untested [eTT] 2Gb DDR3 chip price cost $0.683 on average in Taiwan's spot market, 2Gb DDR3 1333MHz/1600MHz chip's price was approximately $0.844, whereas 4Gb DDR3 1600MHz memory IC was priced at $2.545 on average on the spot market.
From the market perspective, DRAM average selling price has been plummeting at an increasing rate since July, reflecting not only weaker-than-expected seasonal demand, but also the fact that supply-side adjustments were not as effective as hoped. Using 4GB module price as the basis of calculation, 2Gb chip price has plunged to a low of $0.84, arriving at spot price levels. Looking at the spot market, as purchasing is weak, module makers are less eager to restock inventory. Both contract and spot prices reflect price negotiation difficulties, and transaction volume has been much lower than last quarter, clear indication that both module makers and PC OEMs have high stock levels; thus, buying momentum is not likely to pick up in the short term. In the absence of large-scale production cuts, TrendForce expects contract price will remain on a downtrend.
As the PC market has matured in recent years, in addition to the fact that the global economy is expected to worsen in the second half of this year, TrendForce forecasts PC shipments will see -3.9% growth for 2012. Furthermore, as consumers’ limited budgets and changing preferences steer them towards other mobile devices, smartphones and tablets are experiencing high growth while the PC market suffers. It is clear that PC demand is not as it was; the category is no longer the market mainstream, as shown by the fact that the 2012 PC DRAM shipment ratio has fallen below 50% for the first time.
On side, although makers are beginning to favor non-commodity DRAM production, PC DRAM supply is still in excess, which indicates restoring the supply-demand balance can no longer be achieved via production adjustments. A portion of commodity DRAM capacity must be permanently reduced if industry supply levels are to be lowered. According to TrendForce data, 2HSept. 4GB module price is approaching last year’s low, and is already below every DRAM maker’s total cost (based on mainstream 30nm process). Losses from commodity DRAM are not decreasing, and price is expected to continue falling in the short term unless large-scale capacity cuts are initiated.
copyright 2012 Ron Maltiel all rights reserved