2008 a 'disastrous' year for memory

The memory chip market has suffered over the past 12 months

2008 has been a ‘disastrous’ year for most memory chip manufacturers, according to a report by market watcher iSuppli.

Revenue has fallen for nearly all suppliers and contributed to negative results for the overall semiconductor industry, the analyst claimed.

Dale Ford, senior vice president of market intelligence services at iSuppli, said: “Global semiconductor revenue is expected to decline by two per cent in 2008 due to a 16.9 per cent plunge in sales of memory integrated circuits (ICs). Only two out of the top 29 memory IC suppliers will see revenue grow in 2008. For the memory IC business, 2008 can only be described as disastrous.”

However, the downturn in semiconductor revenue is not just limited to memory suppliers. According to iSuppli, six of the Top 10 semiconductor suppliers are expected to suffer revenue declines this year, including Texas Instruments and Sony.

“In the face of increasingly negative economic news, orders for semiconductors have virtually stopped, leading to great fear and uncertainty throughout the entire semiconductor industry,” Ford added.

Of the top 20 semiconductor suppliers, the memory IC suppliers will suffer some of the largest declines in revenue, iSuppli claimed. The worst performer is expected to be Hynix Semiconductor with a drop of 29.1 per cent, which will send it tumbling down the rankings to ninth place from sixth place in 2007.

Micron Technology is also set for a 9.2 per cent revenue decrease in 2008, with its ranking slipping from 15th place to 16th place. Samsung Electronics is also set for a 9.1 per cent decline in 2008 according to the analyst.

Other firms set to suffer large declines in revenue, iSuppli claimed, include Qimonda with a fall of 40.7 per cent, Nanya Technology with a 29.1 per cent decrease and Powerchip Semiconductor with a 23.4 per cent drop.

Every memory segment is set to decline in 2008, with DRam leading the way with a 19.8 per cent drop in revenue. NOR flash memory will drop 16.2 per cent and SRam will decline by 16.1 per cent. Nand flash memory will also drop for the first time in the history of the market, with a 13.1 per cent decrease.

Ford added: “About the only good thing that can be said about the 16.9 per cent decline in memory revenue in 2008 is that it pales in comparison to the 48.2 per cent plunge in 2001. However, the dot-com-bust decline in 2001 was preceded by a 42.7 per cent surge in 2000.”