LONDON Capital expenditure by DRAM makers will increase by 80 percent year-on-year to $7.85 billion in 2010, according to DRAMexchange Technology Inc., a Taiwan-based market analysis company. The company estimated the DRAM makers will spend $4.30 billion in 2009.
However, this amount of spending is still below the typical annual capex levels in the last decade of $10 billion and far below the peak annual capex spends of $16.5 billion and $21.4 billion spent in 2006 and 2007, respectively.
The capex is expected to grow to the level of $10 billion to $12 billion in 2011 and 2012. According to DRAMexchange the low capex spend in recent years and expanding demand for personal computers will restrict DRAM supply and keep demand high and that DRAM vendors can maintain their operational profitability.
In the first quarter of 2010 DRAM aggregate demand will be slightly below aggregate supply. This will cause the DRAM price to fall between 10 and 20 percent QoQ. Meanwhile, the DDR3 memory will become the mainstream memory in 1Q10 reaching 60 percent market share. It will rise to 80 percent of commodity DRAM at 2H10.
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