DRAM market shifts away from PCs

Personal computers accounted for less than half of the DRAM market during the second quarter of 2012.

According to IHS iSuppli analyst Clifford Leimbach, this marks the first time in a “generation” that PCs didn’t  consume the majority of the leading type of semiconductor memory – and is yet another sign the technology industry has entered the post-PC era.

Indeed, PCs in the second quarter accounted for 49.0% of DRAM bit shipments, down from 50.2 percent in the first quarter. The fall is notable, says Leimbach, given that the share of PCs hasn’t dipped below 50 percent since the 1980s, when personal computers were a new product whose sales were rising at rapid clip.

“This event symbolizes the decline of the PC market because of smartphone and media tablets. However, beyond symbolism, the development also illustrates the diminishing dominion of PCs in the electronics supply chain,” said Leimbach.

“[Of course], the arrival of the post-PC era doesn’t mean that people will stop using personal computers, or even necessarily that the PC market will stop expanding. [Rather], personal computers are not at the center of the technology universe anymore – and are seeing their hegemony over the electronics supply chain erode.”

Leimbach also confirmed PCs are no longer generating the kind of growth and overwhelming market size capable of single-handedly driving demand. To be sure, the fact that PCs have lost their majority share of the DRAM market – an area completely defined and dominated by personal computers for about 30 years – represents a major milestone and the arrival of a new era in technology.

“For DRAM suppliers, the focus in the future increasingly will be on serving the needs of fast-expanding new markets for smartphones and tablets, at the expense of catering to the PC business,” Leimbach noted.

”This follows other indications of the waning influence of the PC business in the electronics business. Such factors include the declining power of the Wintel alliance, as well as Apple’s smartphone- and tablet-driven ascendency to chip purchasing leadership above traditional PC-oriented frontrunners like Hewlett-Packard.”

Although the analyst said the decline of PCs in DRAM share appeared irreversible, he did emphasize that PCs would remain the largest single market for DRAM at least through the end of 2013, with overall DRAM bit shipments for personal computers continuing to grow.

In sharp contrast to PCs, the DRAM share claimed by media tablets will continue to rise, gradually expanding by 4 percentage points until it hits 6.9 percent by the fourth quarter next year. Meanwhile, cellphones are set to experience even faster growth, with their share of DRAM bits jumping to 19.8 percent in the fourth quarter of 2013, up nearly 7 points from 13.2 percent in the second quarter of 2012.

The combined share in the fourth quarter of 2013 by handsets and tablets of the DRAM market will reach 26.7 percent – almost double from 14.1 percent in the first quarter this year.

“Tablets have been growing in popularity since the iPad was introduced in 2010 at the cost of PCs, especially notebooks, with tablets being regarded as acceptable PC complements or substitutes… And despite economic uncertainties worldwide, the tablet market continues to enjoy bright prospects ahead – in part because of the ease of use and portability of the devices, and also because of the ‘wow’ factor associated with them,” he added.