News & Analysis
Mobile DRAM growth cooling
Brian Fuller
9/26/2012 9:15 PM EDT
Topping out on density
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 fluctuations.
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."
Related stories :
-- SK Hynix offers lower power mobile DRAMs
--Analyst: Strong mobile DRAM market drove Micron's Elpida buy
--Samsung delivers 20% smaller mobile DRAM
--Mobile apps bring momentum to DRAMs
--Falling DRAM prices challenge market
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 fluctuations.
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."
Related stories :
-- SK Hynix offers lower power mobile DRAMs
--Analyst: Strong mobile DRAM market drove Micron's Elpida buy
--Samsung delivers 20% smaller mobile DRAM
--Mobile apps bring momentum to DRAMs
--Falling DRAM prices challenge market
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resistion
9/30/2012 8:33 PM EDT
The topping out of mobile DRAM density is noteworthy.
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