DRAM business goes from good, to bad, to ugly

GIANT CHIP MAKER Samsung underlined that the market in DRAM is changing by warning that memory chips could fall by as much as 30 per cent in 2005, bringing an end to a relative bonanza in sales.

According to the Wall Street Journal, Samsung told a UBS investor conference in Seoul today that there wouldn't only be falls in DRAM prices, but in cellphone and LCD displays too, to impact its revenues.

Memory analysts have warned for some time that the DRAM weather is on the turn for the worse.

Justly world famous Andrew Norwood, principal analyst at Gartner, warned this phenomenon would bite over a year ago.

Today he told the INQUIRER: "It's not 2005 that Samsung should be worried about". Norwood said: "The outlook for the DRAM industry over the next few years is simple to sum up, The Good, the Bad and the Ugly."

By that, he means that 2004's 54 per cent revenue growth is good. Growth in 2005 of four per cent is bad.

But, he said, in 2006 the DRAM market will contract by 29 per cent and that is just plug ugly. "In 2006, pricing is going to fall a lot faster than 30 per cent," he said. "Pricing will halve during that year," making it a good year for PC buyers, he said. µ