The "synch" SRAM market could easily be renamed the "sink" SRAM market based on its recent performance.
After contracting in the fourth quarter of 2002, synchronous SRAM sales dove again in the first quarter of 2003, with revenues for almost all suppliers shrinking during the period. Two major application markets, networking and telecommunications, remained in the doldrums, which hit synchronous SRAM revenues hard.
Compounding the issue is the large number of players in this area and an excess of fab capacity, which is driving down prices.
Poor end-market conditions and oversupply had an unwelcoming effect on synchronous SRAM suppliers in the first quarter, with 13 of the top 15 players in this area experiencing a decline in revenues, and nearly half suffering double-digit decreases.
Synchronous increasingly appears to be the sick man of the SRAM market. Indeed, of the three major segments -- asynchronous, Pseudo SRAM (PSRAM) and synchronous -- synchronous is performing the worst.
Overall SRAM revenues in the first quarter amounted to $621 million, up about 0.2% from the fourth quarter of 2002, according to iSuppli. However, synchronous parts, which represented 28.8% of the overall SRAM market in the first quarter, suffered a sequential revenue decline of 18% during the first three months of the year, falling to $178.9 million.
In the fourth quarter of 2002, synchronous SRAM generated $217.9 million in total revenue, representing 35% of the overall SRAM market, a decline of 16% from the previous quarter.
With networking and telecommunications businesses still struggling, iSuppli predicts synchronous SRAM sales will continue to be weak for some time to come.
These poor market conditions appear to validate Micron Technology Inc.'s recent move to exit the SRAM market, a development first detected by iSuppli.
Among the synchronous SRAM suppliers, Samsung Electronics Co. Ltd. in the first quarter retained its No. 1 position in the market, with a 25% share of revenues. At $44.6 million in sales, Samsung suffered a quarter-on-quarter decline of 9%.
Hardest hit among the top 10 was the once-dominant player in the synchronous SRAM market, IBM Microelectronics. With first-quarter revenues of $21.7 million, IBM experienced a quarter-on-quarter decline of 39%.
IBM and Samsung were not alone as all of the top 10 synchronous SRAM suppliers suffered quarter-on-quarter losses.
iSuppli estimates that in 2002, synchronous SRAM revenue amounted to $920 million, representing 36% of the total SRAM market. While overall SRAM unit sales increased slightly in the first quarter, this was due to demand for PSRAMs and asynchronous SRAMs for wireless applications.
Despite poor market performance, there is a need for the kind of functionality provided by synchronous SRAM, iSuppli believes.
In most networking applications, continuous high-speed movement of data through the SRAM is a necessity. In these applications, there are continuous transitions between reads and writes through the memory. Presently, networking and telecom equipment makers are employing synchronous pipelined or flow-through SRAMs, or no-bus-latency or zero-bus-turnaround SRAMs.
However, in newer networking and telecommunications equipment, increased throughput is not enough, as these new applications require reads and writes to be conducted simultaneously. Applications such as ATM switches and routers will benefit from such new synchronous SRAM technologies as Quad Data Rate (QDR) II, Double Date Rate (DDR) II, and SigmaRAM.
These new technologies will drive the density curve for synchronous SRAMs to 18Mbit in 2004 and to 36Mbit in 2005 and also drive up synchronous SRAM revenue in the future.
On the other hand, for this increase in revenue to transpire, a resurrection of the wired communications space is required. Until then, iSuppli predicts the synchronous SRAM market will continue to decline, with sales falling through 2003 and into early 2004.
Betsy Van Hees is a senior analyst covering memory for iSuppli Corp. Van Hees co-authored the Market Brief, "Is the Flash Always Greener on the Other Side of the Fence?" for iSuppli's Flash-SRAM-Specialty Memory service. Jim Cantore, principal analyst, memory, was the report's other author. Contact Van Hees at firstname.lastname@example.org and Cantore at email@example.com.