IHS: DRAM market recovery depends heavily on PC shipments in 2013

Summary:PC shipments have been slipping worldwide, and that could spell bad things for supply chain partners this year.

The DRAM market has the potential to recover to continuous growth in 2013--but only if it can get a boost from global PC shipments, based on a new report.

According to IHS iSuppli, worldwide DRAM revenue should reach approximately $30.0 billion this year, which would be a 14 percent increase from the $26.4 billion posted in 2012.

But analysts warned that it all depends on PC shipments, which the market intelligence firm also predicted to grow by at least 8 percent this year--primarily thanks to the release of Windows 8 in October.

Despite that forecast, analysts still don't seem convinced this will happen. Here's why:

Nonetheless, there is significant risk to this assumption. The high price of ultrabooks, in particular, has thwarted adoption of the super-thin computers, and the public at large has been more enamored of flashier gadgets like tablets and smartphones.

If ultrabooks and Windows 8 do not prove to be the vaunted growth drivers that everyone hopes them to be, the demand profile for DRAM in 2013 will be markedly different, IHS predicts.

The flash memory market has been on the decline for some time now. In September, IHS reported about the link between the DRAM market and the hypothesis behind the "post-PC" industry argument. That entailed the finding that, for the first time, PCs accounted for less than 50 percent of the worldwide DRAM market share.

Clifford Leimbach, a memory analyst at IHS, added in the report that DRAM providers need to start focusing more on smartphones and tablets to make up for these pitfalls.

To put that in perspective, IHS reported in October that mobile DRAM revenue hit an all-time high, while the greater flash memory market dropped by nearly 5 percent from the year before.

Mike Howard, a senior principal analyst covering DRAM and computer platforms at IHS, warned in Tuesday's report that if the global PC market doesn't meet analyst expectations this year, then the DRAM segment could be looking at "a third straight year of decline in 2013."

Topics: Hardware, PCs, Processors, Tech Industry

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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