Electronics Production | January 31, 2011
Tablet DRAM demand surges by factor of Nine in 2011
Bucking weak conditions for the overall dynamic random access memory (DRAM) market in 2011, DRAM shipments for tablets are expected to explode by a factor of more than nine this year, according to new IHS iSuppli research.
DRAM shipments this year for tablet devices are projected to reach 353.3 million gigabits (Gb), up a staggering 834.7 percent from a mere 37.8 million in 2010. Shipments of tablet DRAM—the main memory component in these devices—will continue to rise during the years to come, surging to 1.0 billion Gb in 2012, to 2.2 billion Gb in 2013 and to 3.5 billion Gb in 2014, as shown in the attached figure. “The DRAM industry is receiving a major boost from tablets, the undisputed stars of this year’s Consumer Electronics Show (CES) in Las Vegas,” said Mike Howard, principal analyst for DRAM & memory at IHS. “At the show, new tablets such as the Xoom from Motorola Inc. and the BlackBerry Playbook from Research in Motion joined recently released rival products made by Samsung Electronics and Dell Inc.—devices all intended to dent the overwhelming lead for Apple Inc.’s iPad.” Worldwide tablet shipments this year are forecast to hit 57.6 million, up from 17.1 million in 2010. Shipments will continue to climb during the next few years. The strength of memory shipments for tablets contrasts with the weak performance of the overall DRAM market in 2011, where continually retreating average selling prices are expected to spur an 11.8 percent decline in revenue this year. Tablet challenges for DRAM suppliers Despite the heady opportunities presented by tablets for the memory industry, some challenges could be in store for DRAM suppliers. A first challenge concerns the amount of DRAM used by tablets. Many compelling tablet models shown at this year’s CES contained 1 gigabyte (GB) of mobile DRAM—far less than the average 3.2GB of memory used at the end of the fourth quarter in 2010 for PCs—the single largest segment that uses DRAM. Furthermore, while the majority of tablets at the show used the more expensive mobile DRAM, there also were tablets running ARM microprocessors utilizing commodity DRAM—potentially a damaging trend for DRAM companies in light of commodity DRAM’s lower margins. A second test centers on worries that tablets will eat into some PC sales, especially netbooks, which boast similar computing power to tablets. Although netbooks offer the advantage of lower prices, the light weight and long battery life of tablets increase their attractiveness for many consumers. As a result, sales of netbooks stand in serious danger of being cannibalized by tablets, Howard noted.
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