Don't look now, but there are DDR3 SDRAM shortages in the market right now.
What's more, older-generation DDR2 SDRAMs could also be in short supply as well. DDR3 is the third generation of double-data rate (DDR) synchronous memory.

''DDR3 supply is tight,'' said VLSI Research CEO G. Dan Hutcheson. ''Prices are up because of the tight supply.''

Another research firm, iSuppli Corp., predicts the DDR3 shortages will persist during the third quarter, because suppliers can't meet current demand. ''While the limited investment of DRAM suppliers is slowing their 50-nm migration--a process necessary to ramp up DDR3 production quickly--the DDR3 shortage will cause supplies of DDR2 to tighten as tier-one suppliers continue to convert production from DDR2 to DDR3.''

Amid a shortage of DDR3 memory, iSuppli has upgraded its rating of near-term conditions for DRAM suppliers to positive. iSuppli had maintained its negative rating since September 2008 until it upgraded the condition to neutral two weeks ago.

"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," said Nam Hyung Kim, chief analyst for iSuppli.

"The oversupply has been a disaster for the global DRAM industry, with revenue dropping to $23.6 billion in 2008, down from $34 billion in 2006," Kim said.

During this period, the profitability of DRAM suppliers evaporated completely, and the combined operating loss for the entire DRAM industry amounted to $15 billion during the last three years.

DRAM revenue plunged by 19.5 percent in the first quarter compared to the fourth quarter of 2008. However, with the rise in DRAM pricing, revenue increased by 37.5 percent in the second quarter compared to the first. Revenue is set to continue to rise on a sequential basis by more than 20 percent each in the third and fourth quarters.

By: DocMemory
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