Mobile DRAM shipments are projected to reach 2.9 billion gigabits (Gb) in 2011, up 71% from 1.7 billion Gb in 2010. Growth will continue during the following years, with shipments reaching 20.5 billion Gb in 2015, up by a factor of 12 from the total in 2010.
"In contrast with the weakening performance of the overall DRAM market, growth in mobile DRAM is surging thanks to the ongoing proliferation of smartphones on the one hand, and to an increasing public appetite for newly popular tablets like Apple's iPad on the other," said Mike Howard, principal analyst for DRAM and memory at IHS. "As these mobile devices handle more data-intensive applications, demand is expected to escalate for mobile DRAM."
Smartphones in 2014 will consume 36 times more DRAM than they did in 2009. Mobile DRAM also will receive a big shot in the arm thanks to tablets, which will consume 3.5 billion Gb by 2014, up from 35 million Gb in 2010 - an increase of 100 times.
The changing face of the business
Mobile DRAM long has been a very attractive product segment for DRAM vendors. Generally produced based on known demand levels, pricing is mostly driven by cost reductions - not by the wild fluctuations of supply and demand more typical of commodity DRAM. Such a production philosophy is the complete opposite of speculative manufacturing or building a product without known demand, a common practice in the PC DRAM market.
The growth of mobile DRAM, however, has prompted nearly every DRAM maker to roll out mobile DRAM products. As competition mounts, the long-held practice of manufacturing mobile DRAM in volumes based on known demand will change, Howard indicated.
Third parties like Kingston Technology, for instance, will concentrate on just a few product configurations at very competitive pricing, leading to a shift away from elaborate customization toward lower-priced standardized products, Howard said.
Companies also are developing more memory options that support a leaner, less complex ecosystem, according to Howard. Should major CPU suppliers - such as Intel or AMD - decide to launch products that support mobile DRAM, that manufacturer likely would support only a few standardized products in order to cut down on costs and trim redundancies.
Overall, both a rise in the number of mobile DRAM makers as well as greater product standardization point to the likelihood of increased commoditization for the segment, Howard pointed out. And though commoditization may take two to three years to unfold, the first indications should become apparent by the end of 2011.