Gartner Inc. predicted DRAM market is on the verge of recovery with a 37.8 percent year-over-year growth for the current quarter. The market research firm reported an estimated $5.1 billion in sales for Q3 or a 21.8 percent increase from 2002. The company expected a total of $18.9 billion for 2003.

Nevertheless, the company warned the DRAM industry needs to be aware of the tentative nature of the upturn and that pressure will still be on PC vendors and other DRAM users as prices for critical components increase.

"This recovery is going to be based on lack of supply, not increasing demand," said Andrew Norwood, principal analyst for Gartner's semiconductor research group, in a statement. "We have been here before, and if the DRAM vendors become greedy and increase production, the industry will quickly swing back into oversupply and prices will crash.
 
"Stabilizing prices and lower inventories alone do not constitute a recovery in the DRAM industry, but these factors combined, and the positive sentiment in the DRAM industry point to the possibility that the DRAM industry recovery has, at long last, begun," Norwood said. "Recent cuts in planned DRAM supply by major vendors have set the industry up for a possible shortage. If this happens, it will mean a return to profits for vendors and strong revenue growth."

Gartner also said prices in the spot and contract markets began to stabilize in Q2 and have continued to improve. Some major vendors are also reducing anticipated DRAM production in favor of other devices such as NAND flash, which has improved the outlook for the supply and demand situation, the firm said.

By: DcoMemory
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