Memory Drives Chip Growth

Sales of memory chips will increase 10% next year to a new record high of $85.3 billion, according to the latest report from IC Insights. Increases are forecast to continue with sales reaching nearly $110.0 billion in 2021.

Thanks to both rising prices and volume sales, the memory sector is expected to lead overall semiconductor sales growth. The average annual growth rate for the memory market is forecast to be 7.3% from 2016-2021, about 2.4 points higher than the total IC market during the period, the market watcher predicts.

IC Insights forecasts memory unit sales to grow at a 5.6% compound rate. Average selling prices will increase in all but one year (2020) through the forecast at an average annual rate of 1.8%, it said.

DRAM prices will rise next year, boosting the product category to an 11% overall growth in 2017, the market watcher predicts. NAND flash will grow almost as fast at 10% next year, it said.

The outlook marks a rebound for a market that has been hurting the last two years. “After increasing by more than 20% in both 2013 and 2014, the memory market fell upon difficult times in 2015,” IC Insights said in an email bulletin.

A decline in PC sales, the biggest user of memory chips, caused excess inventory and price declines in late 2015, leading to a 3% decline to $78.0 billion for memory chips that year. The fall came despite supplier consolidation, the lack of new capacity and rising emerging markets which normally boost the memory sector.

Weak market conditions began to improve in the middle of this year, though the memory sector is still expected to decline 1% in 2016. Average selling prices fell 3% last year and another 10% this year. NAND flash is the only memory segment expected to show growth in 2016.

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