EL SEGUNDO, CA – China was hoping for an economic boost from the Summer Olympics, but the event actually had the opposite effect on the nation’s DRAM market, plowing a trough in demand right before the all-important holiday season, according to iSuppli Corp.
With China’s attention focused on the event, third-quarter DRAM shipments in the nation are expected to post virtually no growth sequentially, falling short of expectations, says the research firm.
However, while iSuppli believes DRAM demand will begin to recover sharply at start of the pre-holiday ramp, the industry still faces significant inventory, suppressing prices. In the spot memory market, pricing for 1Gbit DDR2 DRAM dropped by a stunning 18% during the week of Sept. 1. iSuppli expects a severe price erosion for the entire month of September. Because of this, it’s a great time to buy DRAM in China, according to the firm
“The games clashed with the traditional summer promotional season for PCs in China, with many consumers glued to their TVs and absent from stores,” said John Lei, analyst, memory ICs and storage systems for iSuppli. “This caused sales momentum to slow. Furthermore, all the IT equipment required for the Olympics was purchased years before the event, meaning there was no Olympic boost for DRAM demand.”
Even before the Olympics, consumer PC demand in China was already facing economic headwinds because of rising inflation, says iSuppli. Beyond this, China’s government engaged in stricter imports control during the Olympics, causing purchasing activity on the DRAM spot memory market to decline.
With the conclusion of the Olympics and the impending start of the holiday season, consumers should start buying more PCs, driving domestic demand for DRAM, says the firm.
Furthermore, China’s consumer price index began to decline in the second quarter and is likely to continue to decrease throughout the second half, reducing inflationary pressures and encouraging consumers to spend.
With most construction and provisioning of national IT facilities completed prior to the Olympics, most PCs now in use at these operations are at least two to three years old. These systems will need to be replaced or upgraded, particularly with the 60th National Day events to be held in 2009.
Also, fast-growing Chinese Internet service companies will be upgrading their systems as they expand their operations to attract more customers. Rather than buying new equipment, many companies are likely to take a cheaper route and upgrade the DRAM in many of their systems, iSuppli predicts.
Regardless of the third quarter, China remains one of the most vibrant markets for DRAM in the world. National PC penetration per family is only at about 55%, which means computer and DRAM demand will continue growing in the future. Much of the growth will be in lower-cost white box PCs, whose sales growth is expected to outperform the branded computer segment in the coming years.
As a result, iSuppli predicts China’s DRAM market will avoid a downturn.
SAN JOSE – Worldwide semiconductor manufacturing equipment billings reached $7.83 billion in the second quarter, down 26% sequentially and 29% year-over-year, SEMI reported.
Worldwide semiconductor equipment bookings were $6.99 billion, down 30% compared to a year ago, and 13% compared to the first quarter, SEMI said.
“Spending for new semiconductor equipment is down considerably, as anticipated,” said Dan Tracy, senior director of Industry Research and Statistics at SEMI. “Overall 2008 spending will approach 2005 levels, with a recovery expected for next year.”
The data were gathered in cooperation with the Semiconductor Equipment Association of Japan from more than 150 global equipment companies that provide data monthly.
PISCATAWAY, NJ– The co-founder and chairman of the board, emeritus at Intel Corp., Gordon E. Moore, will receive the IEEE Medal of Honor for his entrepreneurial and engineering contributions to the advancement of semiconductor technology.
SAN JOSE –Texas Instruments VP of emerging medical applications Doug Rasor will keynote the upcoming Medical Electronics symposium: Technology Concepts Enabling Product Reality.
His talk, How Technology will Revolutionize Healthcare in the 21st Century and Beyond, will highlight the third annual MicroElectronics Packaging and Test Engineering Council event.
The event takes place Sept. 25 at Arizona State University in Tempe.
Other sessions will include Revolutionary Concepts in Medical Electronics; Advanced Materials for Medical Electronics; Key Enabling Technologies, and Next Generation of Bio-Medical Systems.
For more information and to register, contact This email address is being protected from spambots. You need JavaScript enabled to view it. or visit www.meptec.org.
ARLINGTON, VA -- August orders for electronics components rose, reversing a summer dip, the Electronic Components Association said today. Orders remained flat year-over-year, however, the trade group said.
In a press release, president Bob Willis said the cycle is following historical seasonality trends. "Historically, we've seen a summer downturn followed by an acceleration in orders during the fall. I suspect that this is what's happening here."
ECA said it altered the baseline year of its monthly order index from 1996 to 2006 to better reflect the current market. The switch resulted in greater volatility in the adjusted four- to five-week results, but 12-month average results are not affected. Also, the trade group now tracks only North American orders, which ensures greater reporting consistency among manufacturers participating in the survey, ECA said.
WASHINGTON – While enactment of the RoHS Directive made waves, what’s been less visible is enforcement. This week, Fern Abrams, IPC’s director of government relations and environmental policy, discussed the association’s role with regard to RoHS and other looming “green” issues.
