And the winner is… Micron Technology
30 March, 2017
IC Insights: "Huge 37% increase in the DRAM price. At $57.3 billion, the DRAM market is forecast to be by far the largest IC product category in 2017"
IC Insights has raised its worldwide IC market growth forecast for 2017 to 11%—more than twice its original 5% outlook. The reason for this revision is very interesting: The market research company expects DRAM sales to grow 39% and NAND flash sales to increase 25% this year. “DRAM market growth is expected to be driven almost entirely by a huge 37% increase in the DRAM average selling price (ASP), as compared to 2016, when the DRAM ASP dropped by 12%. Moreover, NAND flash ASPs are forecast to rebound and jump 22% this year after falling by 1% last year.”
The DRAM market started 2017 with strong gains in price: In April 2016, the DRAM ASP was $2.41, and rapidly increased to $3.60 in January 2017. This is a 49% jump. IC Insights beleives it is result of growing demand fpr DRAM memory devices by PC suppliers and by mobile devices producers.
With total DRAM bit volume demand expected to increase by 30% this year and DRAM bit volume production capacity forecast to increase by 20%, IC Insights believes that quarterly DRAM PRICES in 2017 could still surprise on the upside. Furthermore, “DRAM output is also being slowed, at least temporarily, by the ongoing transition of DRAM production to ≤20nm feature sizes by the major DRAM producers this year.”
At $57.3 billion, the DRAM market is forecast to be by far the largest IC product category in 2017, exceeding the expected MPU market for standard PCs and servers ($47.1 billion) by $10.2 billion this year. Last year, the DRAM market slumped 8% after a 12% decline in the DRAM ASP. Now, the DRAM segment is forecast to have a positive impact on total IC market growth this year. “It is interesting to note that the total IC market growth rate forecast for 2017, when excluding the DRAM and NAND flash markets, would be only 4%, about one-third of the current worldwide IC market growth rate forecast including these memory devices.”
Micron seized the opportunity
A dramatic demonstration of the effects of the DRAM soaring prices were given earkier this month, when Micron Technology reported its results for the second quarter of fiscal 2017, which ended March 2, 2017. Revenues for the quarter were $4.65 billion – 17% higher compared to the first quarter of fiscal 2017 and 58% higher compared to the second quarter of fiscal 2016. Micron explained that the increase in the company’s revenues was due primarily to a 21% increase in DRAM average selling prices and 18% increase in trade NAND sales volumes.