DRAM market seen rosy - CIOL News Reports

TAIPEI: The coming days are seen as bringing in good tidings for DRAM suppliers. Market research firm iSuppli, which had been maintaining a negative rating for the industry since September 2008, had upgraded the condition to neutral two weeks ago.

Now, the research firm has gone ahead and upgraded its rating of near-term conditions for DRAM suppliers to positive.

The upgrade comes at a time when DDR3 memory is undergoing major shortage and a resulting rise in pricing.

According to Nam Hyung Kim, chief analyst for iSuppli, "the improvement in circumstances is a welcome relief to a DRAM market that has been stuck in a state of oversupply for nearly three years. The oversupply has been a disaster for the global DRAM industry, with revenues dropping from US$34 billion in 2006 to US$23.6 billion in 2008."

It may be seen that the period had seen the profitability of DRAM suppliers fading off completely. The combined operating loss for the entire DRAM industry touched US$15 billion during the last three years, it has been pointed out.

The analyst said that rising demand and limited supply for DDR3 will help the global DRAM industry recover. The recovery would extend into the fourth quarter and pave the way for a robust annual increase in 2010,” it is expected.

During the first quarter of the current year, DRAM revenues had plummeted 19.5 per cent as against the fourth quarter of 2008, iSuppli has said. Now with the the rise in DRAM pricing, revenues have gone up by 37.5 per cent according to the the second quarter figures. It is being expected that the revenues would toe an upward trend on a sequential basis by more than 20 per cent each in the third and fourth quarters

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