Memory Market Facing Huge Changes
Manufacturers of computer memory are already engaged in strategic planning for several years ahead, but with huge changes taking place in the market currently, as well as demands for DRAM taking a hit, some are said to be struggling to figure out how much of their budget to allocate to producing new memory. In recent years, the upgrade cycles of computers have meant that DRAM suppliers have continually advanced their technologies and adjusted their prices accordingly. However, the declining sales of PCs, and the emergence of tablets and smartphones as a potential replacement, has seen the upgrade cycle stretch from just two years up to four or five. The back-to-school season from August to September has been a let-down for many companies, and the Christmas surge is yet to pick up the pace, not even with the glimmer of Windows 8 on the horizon. The manufacturers of DRAM have been unable to improve their sales, and as a result of this, it seems increasingly likely that even the largest companies who produce memory will be reducing their output.
TrendForce, a leading market research company, reports that Samsung, the industry leader of RAM memory, will spent 2013 being highly conservative and will slow down technology migration plans considerably. The majority of companies will face heavy losses in the next calendar year, although TrendForce also believes that the largest suppliers, such as Samsung and SK Hynix, will still be standing when the dust settles. It is companies in Taiwan who will experience the biggest losses and will need to decrease their PC DRAM production by the largest amount. Nanya intends to turn from commodity DRAM to specialty DRAM production, while Powerchip could follow suit. The industry-wide slow output has seen predictions for bit supply growth hit just 22.2%.
Despite all of this doom and gloom, the DRAM industry is a viable, competitive and sustainable market. PC shipments are no longer the mainstream; figures for PC sales dipped below a 50% market share for the first time this year, but it doesn’t mean that this is the end of the personal computer. In fact, tales of the demise of DRAM have been greatly exaggerated. The oversupply which started in the past two years or so has seen prices for 4GB memory solutions fall to historical lows; great for consumers and the general public. Indeed, some of the cheapest 4GB PC memory solutions are now in the region of just $16, meaning that many PC users can now upgrade their existing systems to make them faster than ever. The market may be in dire straits, but this doesn’t mean that the consumer will suffer in any way. The cheaper memory solutions now available won’t dramatically boost the sales of DRAM worldwide, but they can certainly provide a personal computer with a cost-effective and high-quality upgrade.
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