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Sunday, September 16, 2012
PC Share of DRAM Market Dips As Tablet Shipments Soar

In a changing of the guard that also reflects the growing dominion of media tablets, PCs during the second quarter accounted for less than half of the market for dynamic random access memory (DRAM), according to an IHS iSuppli.

iSuppli says that PCs in the second quarter made up 49.0 percent of the DRAM market in terms of bit shipments, down from 50.2 percent in the earlier quarter. The fall is notable, especially as PC share has never dipped below 50 percent, even in the last two quarters prior to the second when the portion commanded by desktops, notebooks and netbooks combined seemed perilously close to ceding half of the DRAM space. Average PC share from the first quarter of 2008 until the fourth quarter of 2011 hovered at approximately 55 percent, with share fluctuating periodically but generally trending down.

And while overall DRAM bit shipments for PCs continue to grow, the decline in DRAM share for PCs appears irreversible. From the second quarter this year to the fourth quarter in 2013, the portion for PCs will contract by another 6 percentage points, sliding to 42.8 percent.

In comparison, the share of tablets will continue to rise. Tablet share of the DRAM space in bit shipments grew to 2.7 percent in the second quarter, up from 1.6 percent in the first quarter, and will gradually expand by 4 percentage points until it hits 6.9 percent by the fourth quarter next year.

Only cellphones, increasing by approximately 7 percentage points during the equivalent period, will have greater growth in DRAM market share among devices. And together, mobile handsets and tablets present a formidable challenge to PCs.

Besides PCs, mobile handsets and tablets, DRAM is also used in items like set-top boxes, liquid crystal display televisions and digital still cameras?devices that altogether account for approximately one-third in bit shipments of the DRAM market.

The expansion in DRAM market share for tablets is a result of the sheer growth in tablet shipments, which has come at tremendous expense to PCs, a traditional DRAM stronghold. For instance, tablet shipments will grow 24 percent in the third quarter and then by 55 percent in the fourth quarter. Laptop shipments, meanwhile, are expected to increase by just 9 and 12 percent, respectively, during the same two periods.

The growing share of tablets in the DRAM market can likewise be attributed to more DRAM bits being loaded onto the devices. The third-generation new iPad has double the DRAM content of its predecessor, with up to 1024 megabytes?or more than 1 gigabyte?compared to 512 megabytes in the iPad 2. The additional DRAM in the new iPad brings it in line with direct competitors such as the Galaxy Tab 7.7 LTE from Samsung Electronics and the Jetstream from HTC, both of which also contain 1024 megabytes of DRAM. Among tablet devices, the Amazon Kindle Fire is the only tablet with less than 1 gigabyte, but the Kindle Fire is not competing directly with the more powerful tablet devices.

iSupply's abalysts claim that DRAM loading in tablets is also solid for the years ahead, reaching 2 gigabytes by 2015 after DRAM loading growth of 79 percent this year, and then tapering to a still-elevated 30 to 40 percent expansion rate from 2013 to 2016.

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