Memory has been very much in the news lately, and rightly so. The inventory management efforts implemented during the recession coupled with the near complete withdrawal of CAPEX has given memory, across the board and intentionally or not, the ASP boost needed based on the simple principles of weaker supply to heavier demand.
One question is the trajectory of the present memory trends. Recent quarterly reports from many of the wafer manufacturers show renewed and even increased CAPEX spends for their memory lines and even new fabs (cf. Samsung's doubling of CAPEX for the most notable of these news items).
The important question is what is the supply-demand near- and longer-term future for memory pricing? During the 1Q10, pricing trended upwards on all DRAM products. The proof of this surge in demand and reciprocal ASP rise can be found in the fact that for 1Q10, DRAM experienced it's highest quarterly revenue in 11 years, according to iSuppli, http://www.isuppli.com/Memory-and-Storage/News/Pages/DRAM-Growth-Approaches-Record-Territory-Setting-Stage-for-Best-Year-Ever.aspx. With OEMs new designs favoring DDR3, the ASP levels are expected to be high because of the demand (e.g., Intel's Nehalem-based chips), and DDR2 has experienced major price declines recently on the broad market scene , nearly 10% .
The volatility has not been as severe in the SDRAM, DDR1, and Mobile DRAM markets, where demand is still strong for consumer electronics products and the supply of the necessary DRAM for them continues to run slightly behind their need. Specifically, 256Mb discrete chips are extremely active in this area.
Similarly on the strength of consumer products, NOR revenue and ASPs are rising and are also seeing increases in demand. NOR supply is also relatively short as suppliers were not anticipating the strength of demand, and this is resulting in better revenue due to both volume and ASP rises. More specifically, this demand increase has translated into a relatively unexpected rise of roughly 4% in NOR revenue for the same 1Q10 period (cf. a complementarly iSuppli report here http://www.isuppli.com/Memory-and-Storage/News/Pages/NOR-Flash-Revenue-Set-to-Grow-in-2010-after-Downturn.aspx).
NAND is following a different trajectory with demand slipping. As demand slipped, so did the ASPs during May. Pulling back historically, and considering the terrible fall NAND took during the global recession, NAND is still head of the historical lows of December 2008 (cf. EETimes here http://www.eetimes.com/showArticle.jhtml?articleID=224701452&cid=NL_eet).
What's going on in the memory market? After peaking in April, ASPs stalled and eventually headed down in May as OEMs resisted the attempts by DDR3 vendors to increase prices (cf. DigiTimes 5/14/10). Yet, there is continued strong demand for products, especially PCs and other consumer devices that rely on DDR3. Pricing trends should continue to hold for the near term. The upcoming “back to school” builds should keep demand solid with pressure on pricing – especially DRAM3 pricing. We are also near an important transitional point for memory right now. As we move to both smaller architectures (new fabs and lines are moving to the 30nm range) and new wafer sizes (300mm) http://www.eetimes.com/showArticle.jhtml;jsessionid=HCEATOR424PMNQE1GHPCKHWATMY32JVN?articleID=224600576 as well as the transition from DDR2 to DDR3. These transitions are the mainstay of the semiconductor industry and provide momentum our growth opportunities and prospects.