Memory dominates 2006 semiconductor sales

Growth in the memory sector in 2006 was twice as fast as that of the overall semiconductor industry, according to new data from Gartner.

Fuelled by solid growth in DRam, worldwide memory revenue is on pace to grow 21.5 per cent, with revenue surpassing $60.4bn in 2006, according to the analyst firm.

In 2007, Gartner predicts that the sector will experience slower growth, with worldwide memory revenue reaching $66.3bn, a 9.8 per cent increase from 2006.

"The memory sector has experienced strong revenue growth in 2006, as conditions for DRam have continued to improve, with supply tightly controlled by suppliers and average selling prices holding firm,” said Richard Gordon, managing vice president at Gartner.

"In contrast, prices for Nand Flash memory have declined further than expected as competition has intensified, so revenue growth in the Nand sector in 2006 is modest at best, compared with stellar growth for the past four years."

This strong demand for memory meant that vendors such as Infineon Technologies' Qimonda, Hynix Semiconductor and Elpida Memory, substantially outperformed the market in 2006 and registered strong revenue growth in Gartner Dataquest's preliminary market share rankings.

"We expect DRam revenue to keep growing in 2007, although support from the Nand Flash market will be less of a factor because we expect manufacturers to convert production capacity back to DRam in the coming quarters," Gordon added.

Worldwide DRam revenue is forecast to reach $33.9bn in 2006, a 34.4 per cent increase from 2005. DRam revenue is estimated to grow 15 per cent in 2007 to $39bn. In 2008, this segment will peak, and the market is expected to decline in 2009.