SRAM prices to decline as demand declines and market shrinks
By James Carbone -- Purchasing, 3/12/2009 2:00:00 AM
Buyers can expect static random access memory (SRAM) prices to fall by about 9% a year through 2013 as unit shipments decline by about 6%, according to researcher IC Insights.
The average price for an SRAM will drop from $1.69 in 2008 to $1.39 in 2009. By 2013 the price will be $1.13.
There are several reasons for the price decline, says Brian Matas, vice president of researcher at IC Insights, based in Scottsdale, Ariz. Demand for SRAM is declining as more as more SRAM functionality is being embedded on other chips such as microcontrollers. SRAM is similar to DRAM, but does not need to be constantly refreshed as DRAM does. SRAM provides faster access to data and is more expensive than DRAM. It is less dense than DRAM, but more power efficient.
Use is also dropping because OEMs are trying to use fewer types of memory to reduce component count. "For instance, cell phone manufacturers want to reduce the variety of components in systems and cut down on the different memory types if they can," says Matas. "If they can use one or two memories rather than three or four in a system that would be their goal."
By doing so, manufacturers can cut down on the number of suppliers they have to manage and reduce total cost.
The shift away from SRAMs means the overall SRAM market will decline by about 15% per year through 2013. Total global SRAM revenue will drop from about $1.7 billion in 2008 to $1.3 billion in 2009. By 2013 the total global SRAM market will be just $820 million, says IC Insights.
A shrinking market is bad news for buyers who continue to purchase SRAMs. Why?
One reason is that suppliers won't invest in SRAM technology.
"Samsung is not investing in research and development for SRAM because we see it as a shrinking market," says OS Kwon, associate director of mobile product marketing for Samsung in Korea. Other major suppliers won't invest in R&D or in process technology because demand is declining.
"There are also going to be fewer suppliers," says Matas. "The bigger memory suppliers will be looking to phase out production or cutting it back to just the most profitable devices." Such suppliers include Samsung, Cypress and IDT.
He says SRAM production may move to smaller chip companies that currently derive a small portion of their revenue from SRAM.
"These suppliers might be just looking at DRAM as a sustainable business that generates some, but is not something they are putting a lot of money into," he says.
However, despite the decline of the SRAM market, it will not totally disappear because the chips are used in a wide variety of equipment, including communications equipment, mobile telephones, industrial controls and automotive subsystems, notes Mark DeVoss, senior analyst for flash, SRAM and MCP at researcher iSuppli in El Segundo, Calif.
He says demand will be strongest for fast higher density high-performance SRAM.
"The high-performance SRAMs that are used in networking and communications equipment have densities of 18, 26 and 72 megabits and have higher prices," says DeVoss. "They are the fastest memory and have sub-5 nanosecond access times that market is alive and well." Such devices are used in routers among other equipment.
Networking companies tend to use higher density SRAMs. They "found it is better to use one 72 megabit part rather than a bunch of 2 megabit parts" because it cuts down on board space.
Although SRAMs are used in networking equipment, they too will be designed out of some equipment in favor of DRAM, says Kwon of Samsung.
In the short-term the high-performance SRAM segment could see a boom in demand if "there is a refresh of the communications infrastructure," according to DeVoss. However, right now there aren't a lot of companies upgrading equipment, he says.
Expect higher DRAM prices later in the year
07/01/2009Expect higher DRAM prices later in the year
06/16/2009SRAM fundamentals favor buyers in 2002
04/17/2002SRAM Prices to Fall
03/12/2009
Now Playing: 