IDC Forecasts Worldwide DRAM Market Will Shrink to $24 Billion in 2001

MOUNTAIN VIEW, CA – MARCH 2, 2001 – The DRAM market will decline sharply this year. According to IDC, total DRAM revenue will reach $23.8 billion in 2001, a revenue decrease of 18% and severe 46% price erosion compared with 2000.

 

"The DRAM market suffers from a combination of sluggish demand in the PC industry and a harsh inventory correction in the overall supply chain," said Soo Kyoum Kim, manager for IDC's semiconductor program. "Inventory carryover will continue to plague demand and supply conditions until the middle of the third quarter, making it difficult to maintain current pricing levels. Seasonal price recovery is expected by the end of the third quarter, but will not be strong enough to turn the negative momentum of the market."

According to IDC, the average DRAM content per PC will reach 174MB – a 36% bit growth over 2000 – as a result of price elasticity. This will push overall bit demand growth in 2001 to 56% while supply will grow by 52%. Despite the small gap, lingering inventories, limited memory budgets of PC OEMs, and the lack of a new OS to drive more hungry applications on PCs will still remain as the key inhibitors to demand.

Because the prices of all standard products are approaching or have already reached below production cost, migrating to the next-generation processes will be critical for suppliers to remain competitive. Memory suppliers will also be more tactical this year as they support broader and more profitable interface products such as EDO (extended data out), PC66/100 SDRAM, DDR (double data rate), and Rambus. The mainstream 128Mb market will be the major battleground this year as suppliers shuffle for market share to hedge against price erosion.

"The DRAM industry has already lost the momentum to sustain positive revenue growth this year and in 2002, as the market enters an earlier-than-expected bust cycle. The stage is set for another market restructuring, with the winners and losers clearly being identified over the next year,"Kim said.

IDC's report, Worldwide DRAM Demand and Supply, 2000-2001 (IDC #B23114), examines the short-term DRAM market conditions by providing an extensive analysis on the major demand trends, MB per system growth by application, supplier's volume run rates, and product strategies, and gives our short-term outlook on price trends. The report also provides market insight to all market participants by illustrating feasible scenarios for the DRAM market this year. To purchase this report, please contact Patrick Steeves at 1-800-343-4952 extension 6787 or psteeves@idc.com.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

 

# # #

All product and company names may be trademarks or registered trademarks of their respective holders.