Micron paints rosy picture for memory sector

Sep 06, 2012 -By Lisa Wang

US memory chipmaker Micron Technology Inc has predicted the global memory industry would become less volatile on the back of landscape consolidation and slowing technological migration, a company executive said yesterday.

Changes in applications that use memory chips are also helping, Micron chief executive Mark Durcan said in a speech to a Taipei semiconductor summit.

“The DRAM business, memory business and NAND business will continue to grow. I think what is more interesting on this chart is that it is going to continue to grow and it is also going to start becoming less volatile,” Durcan said.

He added that the global memory industry has changed over the years, saying that 15 years ago, 90 percent of DRAM chips were used in PCs, but that figure has been reduced to less than half, or even 30 percent, Durcan said.

In terms of absolute memory chip use, growth would mostly come from mobile devices, he said.

Over the 2012-2016 period, the compound annual growth rate for tablets would be 33 percent by unit and ultra-thin laptops would expand 72 percent, while notebook computers would increase just 4 percent, Durcan said.

On the supply side, the annual growth rate in DRAM chip output would hit 46 percent, Durcan said, adding that slowing technological migration would also lessen the volatility in supply and demand.

Volatility in chip prices has caused financial losses at most memory chipmakers. Nanya Technology Corp (南亞科技), the nation’s biggest memory chipmaker, posted a loss of NT$39.88 billion (US$1.33 billion) last year after DRAM chip prices plummeted 46 percent year-on-year.

On industry consolidation, Durcan said this happened not only to memory chip suppliers, but also to equipment suppliers and customers. The number of memory chip suppliers has fallen to nine from 41 and the number of customers has been reduced to 11 from 32 in 2007.