DRAM Market Facing Supply Challenges, Report Finds

 
 
By Nathan Eddy  |  Posted 2010-08-10 Email Print this article Print
 
 
 
 
 
 
 

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 mark."

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."


 
 
 
 
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.
 
 
 
 
 
 
 

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