Mobile DRAM Market to Grow 71 Percent in 2011: iSuppli
Driven by strong demand for all kinds of mobile devices, the mobile memory market is poised for "stratospheric" growth in 2011, according to new research.
Shipments of mobile DRAM (dynamic random access memory) are projected to grow 71 percent in 2011 and reach 2.9 billion gigabits, up from 1.7 billion gigabits in 2010, IHS iSuppli said Feb. 11. The upward trend is expected to continue for the next few years, and DRAM shipments will reach 20.5 billion gigabits in 2015, up by a factor of 12 from 2010 figures, according to the research firm.
The growth "defies" the slowdown in the overall DRAM market as a result of the "ongoing proliferation" of smart phones and an "increasing public appetite" for tablets, according to Mike Howard, principal analyst for DRAM and memory at IHS iSuppli.
"As these mobile devices handle more data-intensive applications, demand is expected to escalate for mobile DRAM," Howard said.
Mobile DRAM is a specialized variety of memory with advanced power-management features that can instantly store and retrieve data. Memory vendors consider mobile DRAM very attractive because it is generally produced against "known demand," and not subject to the "wild fluctuations" of supply and demand that drive commodity DRAM sales and pricing, according to Howard. That may not be the case for much longer, he said.
While the projected growth is very good news for mobile DRAM vendors, it will lead to a gradual decline in margins, IHS iSuppli warned. Surging growth has prompted "nearly every" DRAM maker to roll out its own mobile DRAM offering, increasing the number of competitors in the space, Howard said.
Third-party vendors like Kingston Technology will concentrate on just a few product configurations at very competitive pricing, according to Howard. There will be less focus on elaborate customization and more on lower-priced standardized mobile DRAM products, forcing overall prices down, he said.
In 2014, smart phones are expected to consume 36 times more DRAM than they did in 2009, according to the research results. Tablets are expected to consume 3.5 billion gigabits of mobile DRAM by 2014, up from a mere 35 million gigabits in 2010, according to IHS iSuppli.
"Such growth in demand, although representing a tremendous boon for mobile DRAM makers, nonetheless will contribute to commoditizing the product and will spur a gradual decline in margins," Howard wrote.
Companies are also developing more memory options that are leaner and less complex, according to Howard. Manufacturers are more likely to support standardized products to cut down costs, he said.
The move toward greater product standardization-which increases the competition among mobile DRAM vendors and results in falling prices-indicates the likelihood of mobile DRAM becoming commoditized, much like the PC DRAM market, Howard said. The commoditization is expected to take two to three years to unfold, but the first indications should become apparent by the end of the current year, Howard said.