The world of computer memory chips or DRAM has been plagued with overstock, lack of demand and simply too many players in the field since the tech bubble and their stock prices suffered horribly as evidenced by this 10yr monthly chart of MU. Factories were idled, most were forced to sell at a loss and inventories were high. But the worldwide financial crisis may have changed that paradigm, squeezing small players [some failing] and increasing M&A activity; leveling more of the playing field. In 2009 we finally saw continual increase in demand as shown in the graph right from the Dram Exchange and prospects for 2010 demand are high with the October launch of Windows 7 and its touchscreen technology. At this point, there’s even word of an unheardof DRAM shortage for 2010 which is just amazing. So is DRAM out of the woods now?
PCWorld commented in July ’09 on PC makers scrambling for certain parts, such as small LCD screens and DDR3 (double data rate, third generation) DRAM chips and the release of touchscreen technology only increases that demand as other players follow suit going forward. In fact, CAPEX [capital expenditures] are estimated to increase 80% in 2010 and companies such as Micron [MU] and Samsung. 80% That’s huge. So is DRAM out of the woods? At least for once the prospects are encouraging that some of these players will finally dig their way out of the OTC graveyard.