The global DRAM module market is expected to rebound gradually in 2008, predicts market research firm iSuppli.

Global revenues from third-party shipments of DRAM modules is expected to rise to US$8.9 billion in 2008, up 9.4% from US$8.1 billion in 2007. In contrast, third-party DRAM module revenues declined 33.5% in 2007, down from US$12.2 billion in 2006.

"Last year was disastrous for the DRAM chip industry, due to an acute oversupply and the resulting price plunge. This caused global DRAM chip revenues to decline by 7.3%. The poor conditions in DRAM chips led to even worse conditions in the DRAM module business. The third-party DRAM module makers bore the brunt of the downturn, because they lost market share to their chip suppliers," said iSuppli.

Market winners included leading supplier Kingston Technology, which managed to increase its DRAM module revenues by 1.1% in 2007. And while number-two Smart Modular Technologies suffered a 3.5% decline in revenues, the company still outperformed the overall industry, allowing it to expand its market share for the year to 7.9%, up from 5.5% in 2006, iSuppli said.

Kingston and Smart did well because they maintain a full spectrum of DRAM module business activities, ranging from aftermarket sales to well-diversified OEM businesses.

The biggest winner on a percentage basis was number-six ranked Apacer Technology, which expanded its sales by a remarkable 24.4% in 2007. The company benefited from a deal made by its parent company, PC maker Acer, to acquire Gateway, which massively expanded Apacer's sales. Because of this, Apacer in 2007 came very close to reentering the top-five rankings for the first time since 2005.

On the other side of the equation, many of the second-tier, third-party DRAM module makers now are considering exiting the business.

"Many of the smaller players are struggling over the question of whether to quit the DRAM module market," Lei said. "Although market conditions are set to improve soon due to the inevitable price rebound, it's uncertain how long these companies can stay in the business given the top-tier suppliers' aggressive moves to expand their market share," the company said.

Despite these challenges, the third-party DRAM module business still offers attractive growth opportunities to those companies able to stay afloat.

By: DocMemory
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