Fewer DRAM Makers in 2009, Smaller Revenues in November

The DRAM market is expected to shrink next year

According to the latest news on the web, Taiwan's major DRAM makers, namely Inotera Memories, Nanya Technology, Powerchip Semiconductor Corporation (PSC) and ProMOS Technologies, are expected to unveil double-digit sequential drops in their November sales. In addition, the news indicates that the four DRAM players should register narrower operating losses due to cost controls that include capacity cuts.

The companies are already reported to have reduced their capacity by 15-20 percent while trying to stabilize DRAM pricing and turn to more efficient production. On average, the price of DDR2 1Gb eTT chips dropped to $0.68 in comparison to $1.06 for branded 1Gb DDR2 parts. Industry watchers have stated that they expected the prices to fall even more, dropping beyond production cost line.

On related news, we learn that the number of DRAM manufacturers in Asia is reported to shrink during the next year. According to an analysis performed by the Paris Stock Exchange and cited by news site cnYES, the number of DRAM makers next year will fall to six, down from 11 in 2004. The bottom line is that DRAM industry in Asia will inevitably experience industry consolidation. As many of you know, things haven't been too good for this market segment throughout 2008, and it seems that the effects will be seen in 2009.

As the analysis states, $132 billion in production value have been generated by the Asian DRAM industry over the recent 11 years, from 1997 to 2008, which means that this is a profitable business. On the other hand, the number of Asia's DRAM makers went down from 26 participants in 1995 to only 11 players in 2004 due to the maturing of the market. The ongoing economic turmoil is expected to lower the number of makers during 2009.

Fewer DRAM Makers in 2009, Smaller Revenues in November

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