IHS: DRAM market will shrink by 22% in 2019

Research firm IHS Markit expects declining average prices and weak demand to plague the DRAM market in the third quarter of this year, leading to a significant decline in 2019 after two years of explosive growth. IHS estimates that the DRAM market will be valued at just over $77 billion this year, down 22% from 2018. For comparison, the DRAM RAM market grew last year by 39%, and in 2017 by 76%.

IHS Deputy Director Rachel Young said in a statement that moves such as Micron's recent decision to cut production of memory chips are not surprising in light of current demand and market conditions. “In fact, most memory chip manufacturers are taking measures to manage supply volumes and inventory levels in response to the problem of declining demand,” Ms. Yang said.

According to IHS forecasts, the increase in supply and demand will remain at the level of 20% in the coming years, which will keep the overall market in balance. Some periods of oversupply or undersupply are expected, with servers and mobile devices leading the demand-generating categories, according to the analyst firm.

In the longer term, IHS believes that strong demand for server DRAM, especially from tech giants like Amazon, Microsoft, Facebook, Google, Tencent, and Alibaba, will see the server segment consume more than 2023% by 50. total DRAM capacity. For comparison: in 2018 this figure was 28%.

Although smartphone shipments have been slowing since 2016, this category of devices continues to rank second in terms of DRAM consumption. According to IHS, between 2019 and 2023, on average, smartphones will need about 28% of the total capacity of DRAM chips.

Samsung remains the dominant player in the DRAM market, but according to IHS calculations, other manufacturers narrowed the gap somewhat in the fourth quarter of 2018. Samsung is now ahead of its competitor in the face of SK Hynix by 8 points, and Micron - by 16 points (before the difference was more significant).

Samsung this week issued a rare warning of lower earnings expectations, cutting its first-quarter sales and earnings guidance, citing difficulties in the semiconductor market and price pressure in the DRAM sector.

Source: 3dnews.ru