The year 2013 should to be a good one for memory—assuming the anticipated demand materializes for Ultrabooks. Robust sales of the uber-thin laptop promise to push global SSD shipments 83 million, say IHS iSuppli analysts, up from the 2012 figure of 39 million units. Meanwhile, the DRAM is poised for double d-git growth, with revenue slated to reach $30.0 billion, up from $26.4 billion in 2012. To make all of this happen, though, a lot of things need to go right.
After an unnerving sales drop in 2012—the first in more than a decade—PC shipments are expected to grow this year by 8%, driven in large part by sales of Windows 8 Ultrabooks. If that happens, the PC market will take the memory market with it. “The fate of the SSD business is closely tied to the market for Ultrabooks and other ultrathin PCs that use cache drives,” said Ryan Chien, analyst for memory and storage at IHS. “While SSD shipments rose by 124% last year, growth actually fell short of expectations because Ultrabook sales faltered due to poor marketing, high prices and a lack of appealing features.” Smartphones and tablets also eroded the Ultrabook market last year.
Fortunately, there are other forces at work. The enterprise storage market, for example, is also boosting the market, says Swapna Yasaarapu, director, SSD product marketing at STEC. “Data centers are facing an information deluge. There’s a lot of data being created very rapidly and that has to be accessed by a lot of users at very fast speeds.” Facebook, for example, is adding 350 million pictures per day to its image library—roughly 70 TB of data generated and stored daily. In anticipation of enterprise demand, STEC just released a family of 2 TB PCIe and SAS SSDs.
Given the price disparity between flash memory and spinning-disc media, cache applications remain the strongest market driver, not just for enterprise-level systems but on PCs and laptops. Such robust demand should spur growth over the forecast period, for total unit shipments of 239 million by 2016, which represents some 40% of the size of the hard disk drive (HDD) market.
Although SSD pricing is unlikely to ever meet that of spinning-disc media, the technology continually benefits from advances in overall semiconductor manufacturing. The ongoing reduction in price is gradually allowing the technology to be more competitive outside of caching applications, which dramatically increases opportunity.
Source: IHS iSuppli Research, January 2013
Ultrabook demand also promises to benefit the DRAM market, as well. After shrinking for the past several years, as a result of weak demand and oversupply, 2013 DRAM revenue is expected to jump 14% from 2012 figures. “The DRAM industry has been clobbered over the past two years by a combination of weak PC sales and an inflated manufacturing base,” says Mike Howard, senior principal analyst for DRAM and computer platforms at IHS. “The industry this year is expected to benefit from a return to growth in the PC market, combined with consolidation in suppliers.”
The margins are fairly thin in these projections, however. If PC shipments dropped by percent, for example, that would push the market back into oversupply for the balance of the year, triggering a 29% price drop and an overall revenue decline of 7%.
Of course, anybody following the memory market knows that there are other forces at work. Supply will depend on how Micron Technology manages the resources it is acquiring with the Elpida Memory buyout. If it converts assets from DRAM production to NAND flash production, the reduction in inventory could help stabilize the market.
Given the notoriously volatile nature of the industry, DRAM revenue prospects remain highly susceptible to both internal and external forces in 2013, IHS believes. A great deal rests on the verdict on Ultrabooks, Windows 8 and PCs—and on Micron’s capacity allocation decisions for the rest of the industry.