Smart phone makers will, in the next few years, continue to use more
DRAM to improve performance, especially as more graphics-intensive
apps get spun up on phones, but the torrid growth rates are already
cooling, according to Mike Howard, senior principal analyst for DRAM
and memory at IHS.
"There's only so much you're going to do on a smart phone,. You're never going to want to crunch math and
spreadsheets or edit photos like you do on Photoshop," Howard
said in an interview.
"We're just not seeing the need for the depth of DRAM, [but] speed
continues to be important" as the industry prepares for LP
DDR3 launching "in earnest" next year, he added. "Samsung and LG
phones have 2 GB of DRAM. We think this is one of the last steps,
and 2 GB will be the max loading for the duration of next year and
stay mainstream for at least three years."
Better margins, tighrope walking
IHS's latest spot report on DRAMs comes as DRAM makers are
keen not to make the same mistakes they've made historically in the
PC-DRAM market, noted for cutthroat pricing and wild market
Margins in the mobile DRAM market far outstrip those in the
commodity DRAM. Cost per gigabit on a commodity DRAM might be around
50 cents, while the cost per gigabit on a mobile DRAM can be $1.25,
Howard said. The design-in cycle is different and a little more
complicated than in the commodity market, and pricing is agreed upon
sometimes six to 12 months in advance, Howard said. The margins more than
offset the 25-30 percent difference in manufacturing cost between a
commodity DRAM and a mobile DRAM, he added.
But that's not to say the dynamics won't change, in part thanks to
the segment's market-share leader, Samsung, which is also the no. 1
mobile phone maker in the world.
"They understand they're a competitor in many regards to their
mobile DRAM customers. If they [Samsung] don't maintain a dominant
market share, they could be marginalized in mobile DRAM," Howard
said. "Their [mobile-phone] competitors would love to not have to
design them in."
Samsung might be willing "to move prices lower faster if they were
threatened with losing market share," he said. "We're moving into
era with Samsung, Hynix, Micron/Elpida, we're moving to three mobile
DRAM players. Most handset makers want two to three designed in, [but] no one
wants to ruin this corner of the market."
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