DRAM manufacturers' current capacity will last until 2012
Memory IC manufacturers won't invest much in new capacity
Jim Carbone -- Purchasing, 11/5/2009 3:26:38 PM
DRAM manufacturers have enough production capacity to meet demand through 2012 because of huge manufacturing investments the industry made in 2005-2007, according to researcher iSuppli.
DRAM makers spent $50 billion on new chipmaking equipment during that time. That's equal to 55% of total industry revenue over those years according to Mike Howard, senior DRAM analyst for iSuppli. As a result of that spending, DRAM manufacturers increased wafer capacity by 125% and bit output rose 349%.
That capacity expansion led to oversupply and plummeting prices. In 2009 expenditures on semiconductor manufacturing equipment will total $4.4 billion, down 79.2% from the peak of $21.1 billion in 2007. Still, current wafer capacity will be able to meet demand until 2012 or 2013, says Howard.
"Considering it takes about two years to build a new fab, we don't see the need for capital spending to go toward new capacity for the next few years," he says.
DRAM capital spending declines 56%
04/14/2009DRAM prices plunge in first quarter
06/17/2009DRAM inventories fall
09/27/2006
Now Playing: 