The global DRAM business is set to return to annual revenue growth in 2010, according to iSuppli. The research firm's preliminary forecast calls for global DRAM revenues to rise to US$31.9 billion in 2010, up 40.4% from US$22.7 billion in 2009.
The projected growth follows declines of 3.7% in 2009, 25.1% in 2008 and 7.5% in 2007.
"This year will build on the momentum built up in the fourth quarter of 2009, when overall industry revenues increased by 40% sequentially," said Mike Howard, senior analyst for DRAM at iSuppli. "Increased bit shipments combined with higher ASPs were the main factors driving the robust growth."
The fourth quarter of 2009 represented the best period for DRAM suppliers in recent memory, with the industry posting revenues of more than US$8 billion for the first time since the first quarter of 2007, iSuppli noted. ASPs climbed by 16% and bit shipments rose by 21%. The result was US$8.5 billion in revenues in the fourth quarter.
The strong revenue performance came after the disastrous first quarter of 2009, the worst quarter on record for DRAM since the Internet bubble crash in 2001, iSuppli indicated.
Historically, when the DRAM market has experienced fast growth during a quarter, subsequent quarters have seen revenue growth and ASPs fall to extremely low levels. However, current market conditions indicate such a downturn is unlikely.
"iSuppli believes that the DRAM market's strong performance in the fourth quarter will not presage a downturn, such as what occurred when the Internet bubble burst in 2001," Howard said. "However, conditions in 2010 are radically different from 2001, during which time a capital spending explosion resulted in unsustainable growth. Instead, iSuppli foresees a period where the DRAM industry will see solid revenues and steady profits as DRAM suppliers have done a good job managing manufacturing capacity."
Elpida Memory saw revenues of US$1.7 billion in fourth-quarter 2009, up 64% from the prior quarter, according to iSuppli. The company also turned a profit of US$230 million, the first time the company has been in the black on a quarterly basis since 2007. Elpida achieved this feat by attaining higher-than average bit growth of 30% as well as an ASP appreciation of 26%.
Micron Technology also saw its DRAM revenues swell by 50% sequentially in the fourth quarter of 2009, while Hynix Semiconductor rose by 42% and Samsung up by 25%.