Global dram revenue to rise by 40% in 2010?

iSuppli's forecasts that global dram revenue will rise to $31.9billion in 2010, a 40.4% increase on $22.7bn in 2009. This follows declines of 3.7% in 2009, 25.1% in 2008 and 7.5% in 2007. Mike Howard, iSuppli's senior analyst for dram, said: "This year will build on the momentum built up in the fourth quarter of 2009, when overall industry revenue increased by 40% sequentially. Increased bit shipments combined with higher average selling prices were the main factors driving the robust growth. ASPs climbed by 16% and bit shipments rose by 21%. The result was revenue of $8.5bn in revenue in the fourth quarter." According to iSuppli, in the fourth quarter of 2009, dram sector posted revenue of over $8bn for the first time since the first quarter of 2007. This strong revenue performance came after the disastrous first quarter of 2009, the worst quarter on record for dram since the Internet bubble crash in 2001. While iSuppli says that historically, when the dram market has experienced fast growth period during a quarter, subsequent quarters have seen revenue growth and ASPs fall to extremely low levels, current market conditions indicate such a downturn is unlikely. "iSuppli believes that the dram market's strong performance in the fourth quarter will not presage a downturn, such as what occurred when the Internet bubble burst in 2001," Howard added. "However, conditions in 2010 are radically different from 2001 when the Internet bubble burst and capital spending explosion resulted in unsustainable growth. Instead, iSuppli foresees a period where the dram industry will see solid revenue and steady profits as dram suppliers have done a good job managing manufacturing capacity."