CNET también está disponible en español.

Ir a español

Don't show this again

Tech Industry

Commentary: Downturn soon to be memory

The latest downturn in the memory market has resulted from slowing PC shipment growth and extensive inventory build-up, which dates back to last year.

    By Andrew Norwood, Gartner Analyst

    The latest downturn in the memory market has resulted from slowing PC shipment growth and extensive inventory build-up, which dates back to last year.

    Gartner Dataquest expects total memory market revenue to fall from $54.1 billion last year to $33.8 billion this year, a phenomenal 37.5 percent drop. This decline is projected to be followed by partial recovery in the second half of 2002 and sustained growth through 2004. Revenue will likely peak at $87 billion by 2004.

    Revenue composition has become fragmented, with DRAM and SRAM accounting for just over 70 percent of revenue in 2001, compared with almost 90 percent in 1995. Flash memory is responsible for the shift. Having increased to one-fifth of total revenue this year, flash memory is expected to reach one-third by 2005.

    See news story:
    Memory makers ride out downturn
    Flash memory has gained momentum because the revenue driver in the market has shifted from PCs to mobile devices--most notably digital cellular handsets. Flash memory is an essential ingredient in portable applications because they require nonvolatile storage of operating code and data files.

    The trend toward mobile devices is also driving technology development in DRAM and SRAM. Mobile-friendly features such as low power, chip scale packaging and multichip-packaged "combo" devices have gained great importance.

    Since mobile devices are the wave of the future, memory manufacturers may appear immune to future downturns. However, rapidly slowing growth in the flash market of 2001 after triple-digit growth rates in 2000 suggests otherwise.

    Memory market "boom and bust" cycles will continue. Vendors will attempt to insulate themselves from the bust times by developing products for specific applications, such as fast SRAM for networking products and code storage flash memory for digital cellular handsets.

    (For a related commentary on semiconductor markets and manufacturing, see Gartner.com.)

    Entire contents, Copyright © 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.