An iSuppli report warns that a high level of demand in the dynamic random access memory (DRAM) market, coupled with supply bottlenecks, could lead to a DRAM shortage.
Limited manufacturing equipment availability and challenges in process
migrations have the potential to put the brakes on the "high-flying"
dynamic random access memory (DRAM) market
during the second half of the year, with supplies possibly falling short of
demand, according to a report from technology research firm iSuppli. The report
also noted bottlenecks in the availability of tooling equipment and challenges
relating to immersion yield could affect supplies, negatively impacting
second-half DRAM availability.
"A commodity profoundly susceptible to the variable dynamics of supply
and demand, DRAM is expected to ship 15.9
million 1Gbit-equivalent units in 2010, up 48.6 percent from 10.7 million units
last year," said Mike Howard, senior analyst for DRAM
at iSuppli. "Most of the year's growth is forecasted to occur in the
second half of the year, with each of the final two quarters of 2010 expected
to post sequential bit growth of approximately 11 percent. In comparison, bit
growth in the first two quarters of 2010 topped out at far below the 10 percent
Howard said such high levels of growth, concentrated in a six-month period,
would strain the production capabilities of DRAM
suppliers. DRAM is a type of random access
memory that stores each bit of data in a separate capacitor within an
integrated circuit. Unlike flash memory, it is volatile memory, since it loses
its data when the power supply is removed.
The report warned that overall production remains a problem given the
inability of ASML Holding N.V., the world's
largest supplier of semiconductor lithography tools, to supply enough
equipment. While ASML appears capable this
year of delivering an additional 33 immersion scanners, it would not be enough
to resolve the bottleneck, iSuppli's report said. However, the second and more
serious concern that could impact DRAM
supply relates to yield challenges beyond 50 nanometers, the point at which
immersion tooling becomes necessary.
"To be sure, the industry's biggest players-such as Korean giant
Samsung Electronics Co. Ltd., Hynix Semiconductor Inc. from Taiwan, and
U.S.-based Micron Technology Inc.-have successfully made the shift to smaller
lithographies in light of their enormous resources and experience producing
NAND flash memory, which is ahead of DRAM
lithographically," Howard noted. "However, for resource-constrained
companies or for those currently negotiating the transition, difficulties
accompanying such a move might reduce their total output, negatively impacting
the industry's overall bit growth in the process."
The report noted that while Japanese DRAM
supplier Elpida Memory is one example of a company in the middle of transition
as it moves from 6xnm processes to 45nm processes, it is a technological leap
iSuppli said presents "confounding" yield issues. Any unforeseen
setbacks could result in severe supply disruption, the report warned.
"In turn, such dislocation could have far-reaching repercussions,
impacting global bit growth for the rest of the year," the report concluded.
"As a result, overall bit growth projected for 2010 could come in from 2
to 4 percentage points lower than expected, slashing the projected annualized
growth rate from 49 percent to as low as 45 percent."