SAN JOSE, Calif. -- Don't look now, but the DRAM fundamentals continue to deteriorate.
''Commentary from Samsung's analyst day supports our view that the DRAM memory market fundamentals will further deteriorate in 1H '08, with most DRAM players, especially the ones outside of Korea, making dramatic cuts in CY08 capex,'' said Mehdi Hosseini, an analyst with Friedman Billings Ramsey & Co. Inc. (FBR), in a report.
Capital spending in the DRAM sector is expected to fall by more than 30 percent in 2008, versus prior expectations of down 20 percent, he said. This will lead to a 10-12 percent overall reduction in memory capital spending, he said.
After a long downturn in DRAMs, there is still a serious oversupply of parts in the marketplace. ''This is primarily driven by higher-than-expected bit supply growth, with demand remaining relatively in line with expectations,'' he said.
Korean DRAM players were supposedly able to convert DRAM to NAND capacity to help ease excess DRAM
capacity. ''Such conversions not occurring, combined with a higher capacity growth rate, especially in 2H07, has made a bad excess capacity situation worse,'' he said.
''We now expect bit capacity growth of nearly 100 percent in CY07, versus 60 percent from earlier this year and 70-80 percent,'' he added.