The worldwide DRAM industry may see another year of shortage in 2005, at the benefit of the growing NAND flash market, according to Merrill Lynch.

In a January, 2005 report, Merrill Lynch forecast global DRAM shipments would grow 47.9%% to 7.1 billion 256Mbit-equivalent units in 2005, with demand growing 45.9% to 7.2 billion units. Total DRAM sales would grow 9% to US$29.2 billion.

Merrill Lynch argues that as the players in DRAM and NAND flash markets are starting to overlap, key DRAM chipmakers are more prone to allocate their new 12-inch capacity to the faster-growing NAND flash segment at the expense of DRAM, and low production yield on new technologies, including DDR2 and 90nm processes, will then offset a growth in wafer capacity. In addition, their 8-inch fabs will not be efficient for leading-edge products such as 512Mbit DDR2.

Merrill Lynch estimates that the total NAND flash supply will grow to 1.13 million 1Gbit-equivalent units in 2005 from 502 million units in 2004. Demand will grow to 1.11 million units from 472 million units, and total revenues will grow 10.6% to US$7.1 billion.

Merrill Lynch believes that newcomers in the NAND flash industry will only contribute a minimal amount of supply to the global market due to their slow capacity ramp. The firm also notes that the industry could see a shortage if Samsung Electronics and Toshiba could not meet their supply growth target.

On the demand front, Merrill Lynch indicated that handsets could replace digital cameras as the next major demand driver, growing at a compound annual growth rate (CAGR) of 248% from 2004 to 2006. The firm estimated that handsets and digital cameras accounted for 12% and 51%, respectively, of total NAND flash demand in 2004

By: Docmemory
Copyright © 2023 CST, Inc. All Rights Reserved