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Can Touch-Screen Tablets Revive the DRAM Market?

R. Colin Johnson | Date: 02-07-11 | Comments

Touch-screen tablets could help resuscitate the DRAM market in 2011 and beyond if only three caveats can be avoided.

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Can Touch-Screen Tablets Revive the DRAM Market?
The market for dynamic random access memory (DRAM) revived in 2010 from recessionary lows, but price-per-unit drops are causing analysts to predict an anomaly in 2011�depressed earnings despite growth in unit sales.

DRAM exploded in 2010, increasing by 77 percent over the recession years, according to IHS' iSuppli Corp. (El Segundo, Calif.). Unit sales growth will continue in 2011, but declining prices-per-unit will likely depress DRAM revenues overall. However, touch-screen tablets will likely mitigate the overall dip in DRAM revenue by virtue of rising sales of low-power "mobile" DRAM, whose price has remained stable compared with "commodity" DRAM.

Although mobile DRAM is more expensive, it consumes much less power, thereby extending the battery life of touch-screen tablets.

Commodity DRAM�the main memory in PCs, laptops and netbooks�took a beating during the recession, but made a record comeback in 2010. Unfortunately, prices-per-unit took a nosedive in the fourth quarter of 2010 and are expected to continue dropping by another 44 percent in 2011, depressing the market overall by 11 percent next year, according to iSuppli, despite growth in unit sales.

Touch-screen tablet DRAM is expected to skyrocket in 2011 by a factor of nine, compared with 2010, reaching 353.3 million gigabits�up by 834.7 percent from 37.8 million gigabits in 2010. What's more, in the coming years touch-screen tablet DRAM sales will likely continue their surge, growing from 1 billion gigabits in 2012 to 2.2 billion gigabits in 2013 and as many as 3.5 billion gigabits in 2014.

"The DRAM industry is receiving a major boost from tablets," said Mike Howard, principal analyst for DRAM and memory at IHS. "New tablets such as the Xoom from Motorola Inc. and the BlackBerry Playbook from Research In Motion joined recently released rival products made by Samsung Electronics and Dell Inc. as devices all intended to dent the overwhelming lead for Apple Inc.'s iPad."

Next: Three Caveats That Could Keep DRAM Market in Decline >>