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Memory shortages on the cards, warns iSuppli

Microscope contributor

Analysts have raised the spectre of DRAM shortages in the second half of this year, predicting a boom in demand that will put pressure on manufacturing facilities migrating to new production processes.

"A commodity profoundly susceptible to the variable dynamics of supply and demand, DRAM is expected to ship 15.9 million 1Gbit-equivalent units in 2010, up 48% from 10.7 million units last year," said iSuppli senior DRAM analyst Mike Howard.

The issue is that growth is heavily skewed to the back half of the year, with Q3 and Q4 expected to post sequential rises of 11%.

"Such high level of growth, concentrated in a six-month period, will strain the production capabilities of DRAM suppliers.

Samsung, Hynix Semiconductor and Micron Technology had the cash and experience in producing NAND flash memory to shift to smaller lithographies but for those making the transition with less to spend, yield glitches are a distinct possibility, said iSuppli.

Secondly, a shortfall in the equipment used to make DRAM is hampering production, creating a bottleneck in the industry.

"In the end, the loss in bit growth might mean an upward movement in prices," the analysts suggested.

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