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iPad disrupting global DRAM market, causing chipmakers to lose billions

post #1 of 64
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Sales of Apple's iPad tablet computers are crushing the best laid plans of many chip makers, causing a surplus of memory chips after a massive expansion in DRAM factories were built in anticipation of conventional PC growth.

According to a report by Bloomberg, DRAM chipmakers including Elpida Memory and Hynix Semiconductor have lost $14 billion over the past three years, on top of an estimated $37 billion they invested in DRAM factory expansions in anticipation of continued demand for DRAM in the PC industry.

Historically, PC unit sales have grown as consistently as their appetite for DRAM, but when Apple launched the iPad, it delivered a variety of PC-like functions without the same requirements for DRAM memory storage, using just a quarter of the DRAM of the typical PC, with no capacity (or need) for later expansion.

The report quoted Taiwan analyst Chen Liway with Polaris Securities as saying, "DRAM makers invested too much, and they bet heavily that growth of the computer industry would always continue. That would have been OK if the iPad had never come along.

Apple's A5 (shown below), used in the iPad 2 and iPhone 4S, incorporates just 512MB of DRAM, the same amount as its previous generation of iOS devices (albeit RAM of the faster LPDDR2 type). A primary reason for installing less DRAM is that it requires continuous power to keep the chips functional, unlike storage NAND flash RAM.

By designing iOS to conserve the amount of DRAM required, Apple can not only build cheaper devices while maintaining its profit margins, but also deliver leading battery efficiency, something that its competitors have failed to match.



Apple now ships more iPads than all the PCs Dell sells

In the last calendar quarter, Apple shipped 11.1 million iPads, which not only expanded the computing market with less need for DRAM, but also held back sales of conventional PCs. Apple actually sold more iPads than rival Dell sold in all its PCs together (10.6 million).

Sales of the iPad replaced conventional laptops at a variety of companies and schools at a time when the demand for generic PCs has matured in the US. Gartner had originally projected that Q3 PCs would achieve 5.1 percent growth globally, but reported that shipments only grew by 3.2 percent in the fall quarter.

PC sales have been in doldrums since 2008; in the winter quarter of that year, Windows sales dropped by 8 percent rather than growing by 10 percent as Microsoft had expected. Sales remained down during 2009's global financial crisis and then Apple released the iPad in 2010. Apple has since sold 40 million iPads, and may sell another 20 million during this winter quarter, according to Forrester Research.

Perfect storm hits DRAM

The iPad's shifting of consumer demand has had a profound effect on DRAM prices, 65 percent of which is used by the PC industry. The price of DDR3 2 gigabit RAM chips has fallen 61 percent this year, the report noted.

However, after investing $3.8 billion in new state of the art factories, Japan's largest RAM chip maker Elpida said it had to maintain production just to generate enough cash to cover its debt payments, adding to the supply and depressing prices further.

Flooding in Thailand, which has disrupted the supply of hard drives, may push PC unit sales down another 8 percent, according to Fitch Rating analyst Kevin Chang, rather than supporting the 5 percent industry growth that had been expected. On top of that, Microsoft's next Windows 8 is aiming at reducing its memory footprint to enable more efficient battery use, something Apple pioneered with the iPad.

Less DRAM, more NAND Flash

To balance the excess supply of conventional DRAM (used for short term memory storage by the CPU), some chipmakers are shifting to produce specialized chips such as NAND flash RAM, used in SSD storage and by devices like the iPad and smartphones to store data permanently.

While the iPad only incorporates 512MB of DRAM, it contains between 16 and 64GB of NAND flash RAM storage. PCs using SSDs, including Apple's popular MacBook Air models, use 128 to 512GB of NAND flash to replace their need for a conventional, mechanical hard disk drive.

One of the primary beneficiaries of the NAND RAM production is Samsung, which currently supplies parts for the iPad as well as SSD components. The company is the world's largest chip maker, but is also waging a war with Apple over building devices that "slavishly copy" its iPhone and iPad, a move that has Apple reportedly looking for a new manufacturer of its A4 and A5 chips used in iOS devices.

Second place Icheon and fourth place Micron Technology have both shifted their RAM to production toward NAND, which has helped both return to profitability after two years of losses.
post #2 of 64
Computer sales are hurting typewriter sales.

When times were great for DRAM makers, we paid through the nose for it!
post #3 of 64
Evil Apple. I wish they would stop innovating great products that everyone loves more than the old stuff and just DIE!
post #4 of 64
What complete. PC sales are down due to a worldwide recession. Companies aren't spending money upgrading and replacing PC's. Nothing to do with the iPad. It's easy to point a finger at someone else when it's your own bad planning that landed you in the sh!t.
post #5 of 64
The amount of DRAM in iPad and iPhone are irrelevant for the article. The DRAM's are not separate chips, they are part of the A5 chip. There is no additional cost for Apple in the iDevices unlike the Desktops or Laptops.

Also, Windows 7 and Lion are not requiring more DRAM to run optimally.
post #6 of 64
Quote:
Originally Posted by AppleInsider View Post

The price of DDR3 2 gigabit RAM chips has fallen 61 percent this year, the report noted.

That explains why even the el-cheapo computers are coming with 4 Gigs of RAM these days. I've considered going up to 8, but RAM never seems to be a bottleneck for me. I usually have nearly 2 Gigs available.
post #7 of 64
iPad makes billions and the DRAM makers lose billions. I think Gerbil sales are hurting the pet industry. Now how much sense doe that make. Lets blame Apple for making and selling a product that hurts others.
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post #8 of 64
Quote:
Originally Posted by tylerk36 View Post

iPad makes billions and the DRAM makers lose billions. I think Gerbil sales are hurting the pet industry. Now how much sense doe that make. Lets blame Apple for making and selling a product that hurts others.

Okay... joblessness is going up because people quit their jobs to stay at home all day to play Angry Birds on their iPads.

There... unemployment is all Apple's fault. Darn them all to hell!!! \
post #9 of 64
Quote:
Originally Posted by irnchriz View Post

What complete. PC sales are down due to a worldwide recession. Companies aren't spending money upgrading and replacing PC's. Nothing to do with the iPad. It's easy to point a finger at someone else when it's your own bad planning that landed you in the sh!t.

Let me get this straight. You think PC sales are only down due to the recession? Nothing to do with million of folks saying I'll try out an iPad and screw buying yet another PC that will cost more to fix in a year or so than to replace?

If you are correct then explain why Mac sales are climbing at an unprecedented rate? They sell on another planet where there isn't a recession maybe?
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post #10 of 64
Quote:
Originally Posted by irnchriz View Post

What complete. PC sales are down due to a worldwide recession. Companies aren't spending money upgrading and replacing PC's. Nothing to do with the iPad. It's easy to point a finger at someone else when it's your own bad planning that landed you in the sh!t.

Well aren't you the genius. Thanks for explaining it to us. That recession thing must explain the current explosive growth of the iPad, iPhone and Mac.
post #11 of 64
Quote:
Originally Posted by ConradJoe View Post

That explains why even the el-cheapo computers are coming with 4 Gigs of RAM these days. I've considered going up to 8, but RAM never seems to be a bottleneck for me. I usually have nearly 2 Gigs available.

I have two new MBPs one 4 one 8 gigs there is a hell of a difference to be honest. I am upping the other to 8 asap.
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post #12 of 64
Quote:
Originally Posted by tylerk36 View Post

iPad makes billions and the DRAM makers lose billions. I think Gerbil sales are hurting the pet industry. Now how much sense doe that make. Lets blame Apple for making and selling a product that hurts others.

Exactly. It's not as if Steve didn't tell them the PC industry as they knew it was over is it?
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Been using Apple since Apple ][ - Long on AAPL so biased
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post #13 of 64
The iPad is now almost two years old. If DRAM makers and buyers haven't adjusted by now, shame on them.
post #14 of 64
Quote:
Originally Posted by digitalclips View Post

I have two new MBPs one 4 one 8 gigs there is a hell of a difference to be honest. I am upping the other to 8 asap.

Yeah? Good to know. I haven't priced sticks of RAM for a while. Last time I did, upgrading to 8 was very tempting. Maybe by now it is a much easier decision.
post #15 of 64
The article makes perfect sense. Some people here are pretty dense and they wouldn't be able to acknowledge reality, even if it hit them smack in the middle of their face.

Apple now ships more iPads than all the PCs Dell sells

That says it all right there. Just a couple of years ago, Apple sold zero iPads. Now it is selling more iPads than all of the PC's that Dell sells. Nobody in the computer industry anticipated the mind blowing and earth shattering effects that the iPad would have.

Memory makers just counted on the same old boring status quo to remain and they kept investing money in new memory plants, dreaming of a world filled with cheap and ugly PC's. Little did they know that one of the fastest selling technology devices in the history of mankind was soon to be unleashed, wreaking havoc, confusion and panic among Apple's competitor's, causing them all to launch into copycat mode. The many tens of millions of people buying iPads means that they are not buying as many other traditional computer devices as they normally would have, had the iPad not existed. The average person, who is not a content creator or a professional who relies on powerful computers, are choosing iPads, because an iPad is all many of them will ever need.

Now is a great to buy RAM since it is so cheap. I've maxed out all of my machines and installed the max RAM in every single one, since it is so cheap to do now.
post #16 of 64
this is just bs from the makers.

they cried the foul when DDR2 prices dropped.

ddr3 prices is dropping now too and its now a new excuse. If it wasn't ipads/iphones it wouldt just be something else.

you can find 8GB of DDR3 right now for around 30-40 bucks before rebate from Corsair and others.
post #17 of 64
Quote:
Originally Posted by ConradJoe View Post

Yeah? Good to know. I haven't priced sticks of RAM for a while. Last time I did, upgrading to 8 was very tempting. Maybe by now it is a much easier decision.

You can pick up SODIMMs for less than what it costs you to take your wife out on date night. Seriously. 8 GB goes for like $40 at Fry's.
post #18 of 64
Quote:
Originally Posted by AppleInsider View Post

Sales of Apple's iPad tablet computers are crushing the best laid plans of many chip makers, causing a surplus of memory chips after a massive expansion in DRAM factories were built in anticipation of conventional PC growth.

Best laid plans? Apparently these plans aren't all that good if they weren't dynamic and took into account multiple variables. Anticipation isn't planning. Time to re-think the management team, folks.

And do stop with the "this is all Apple's fault" finger pointing. It's just bait piece reporting.
post #19 of 64
Quote:
Originally Posted by ConradJoe View Post

Yeah? Good to know. I haven't priced sticks of RAM for a while. Last time I did, upgrading to 8 was very tempting. Maybe by now it is a much easier decision.

NewEgg had a special recently that was ludicrously low, can't recall exactly but I almost thought it was a miss print,
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post #20 of 64
Quote:
Originally Posted by vexorg View Post

You can pick up SODIMMs for less than what it costs you to take your wife out on date night. Seriously. 8 GB goes for like $40 at Fry's.

You haven't met my wife then
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post #21 of 64
I read a story long ago about an economic terrorism, by building consumer products that never break and were dirt cheap or free. Which caused a collapse of the world economy, light bulbs that never burnout, cars that never need fuel. Strange \
post #22 of 64
Quote:
Originally Posted by vexorg View Post

You can pick up SODIMMs for less than what it costs you to take your wife out on date night. Seriously. 8 GB goes for like $40 at Fry's.

The average Android user most likely spends less than $40 for a date night.

A lovely and intimate dinner for two can be had at the local McDonald's for around $10.00. Within this romantic environment, the Fandroids can also bring free coupons that they have collected so that they can get a free large sized coke to go along with their meal. Going to a real restaurant is too overpriced and not a good value for a Fandroid's wallet. It's all about the price for a Fandroid.

Why should I buy an iPad when I can get something else that only costs $200? The both have screens, so they're practically the same thing.

Why should I bring my girlfriend to Smith & Wollensky's, when I can just bring her to McDonald's. They both serve hamburgers, and they're practically the same thing.

That, ladies and gentlemen, is the mentality of a Fandroid.
post #23 of 64
I'll bet Samsung isn't the biggest chip maker in the world 5 years from now.
post #24 of 64
Quote:
Originally Posted by digitalclips View Post

I have two new MBPs one 4 one 8 gigs there is a hell of a difference to be honest. I am upping the other to 8 asap.


Well it looks like conradjoe doesn't do anything very complicated with his computer since he has 2 gigs spare all the time. Assuming he is running Windows 7, 64 bit, it takes more memory than 32 bit because more memory registers, pointers etc. Just booting and opening a browser is going to eat up 2 gigs. Of course if he is running 32 bit Windows he can only address 3 of the 4 gigs installed anyway so it would be virtually impossible to have 2 gigs spare.

You and I on the other hand run video editing applications so 4 gigs is clearly not enough.

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post #25 of 64
These manufacturers are just being dram-a queens.

Oh quit groaning!
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post #26 of 64
Quote:
Originally Posted by ConradJoe View Post

Yeah? Good to know. I haven't priced sticks of RAM for a while. Last time I did, upgrading to 8 was very tempting. Maybe by now it is a much easier decision.

16GB kits for recent MBPs are around $450.
post #27 of 64
Quote:
Originally Posted by vexorg View Post

You can pick up SODIMMs for less than what it costs you to take your wife out on date night. Seriously. 8 GB goes for like $40 at Fry's.

Wow $5.00 a gig. This makes up for when I paid $100.00 per meg.
post #28 of 64
Quote:
Originally Posted by kent909 View Post

Wow $5.00 a gig. This makes up for when I paid $100.00 per meg.

$100.00 per meg is pretty cheap compared to the around $3000.00 I paid a long time ago for 12 meg RAM for a sampler.

RAM prices these days are a joke.
post #29 of 64
Quote:
Originally Posted by kent909 View Post

Wow $5.00 a gig. This makes up for when I paid $100.00 per meg.

You young'ns...

I paid $1,400 for 48K RAM on my Apple ][ in 1978...
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post #30 of 64
Quote:
Originally Posted by Dick Applebaum View Post

You young's...

I paid $1,400 for 48K RAM on my Apple ][ in 1978...

You were years ahead of me. It wasn't until the 80's that I had my first 48 K computer, an Atari 800.
post #31 of 64
Quote:
Originally Posted by Dick Applebaum View Post

You young's...

I paid $1,400 for 48K RAM on my Apple ][ in 1978...

And I paid 24 groats for my abacus back in 1423...
Believe nothing, no matter where you heard it, not even if I have said it, if it does not agree with your own reason and your own common sense.
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Believe nothing, no matter where you heard it, not even if I have said it, if it does not agree with your own reason and your own common sense.
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post #32 of 64
Quote:
Originally Posted by Dick Applebaum View Post

You young's...

I paid $1,400 for 48K RAM on my Apple ][ in 1978...

$500 for the Commodore 64 in 1982. That was the shit!
post #33 of 64
Quote:
Originally Posted by AppleInsider View Post

PC sales have been in doldrums since 2008; in the winter quarter of that year, Windows sales dropped by 8 percent rather than growing by 10 percent as Microsoft had expected. Sales remained down during 2009's global financial crisis and then Apple released the iPad in 2010. Apple has since sold 40 million iPads, and may sell another 20 million during this winter quarter, according to Forrester Research.

All hogwash. In reality, PC sales are still growing (not counting the iPad or other tablets). They're growing at a slower rate than previously, but they're growing.

Add in the fact that PCs come with more RAM than in the past and it's clear that RAM demand is also increasing.

What happened is the same thing that happens every 3-5 years in the memory industry (same thing happens in the chemical and many other capital intensive markets, btw). When prices are good and business is growing, everyone suddenly decides to build massive amounts of new capacity all at once. When the new capacity comes on line, the prices drop and manufacturers complain about the market (even though the market is still growing, just not as fast as supply). So they stop building new plants until demand catches up with supply and prices go up. Then the entire cycle repeats.

It happens over and over - and has nothing to do with Apple.
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post #34 of 64
i remember when people were calling the iPad and "oversized iphone" and look at it now.

Disrupting PCs, created a brand new market in which dozens of Android tablets are desperate to keep up with, selling 40 MILLION units - which is more than the entire population of Canada!
post #35 of 64
Quote:
Originally Posted by AppleInsider View Post

Apple now ships more iPads than all the PCs Dell sells

In the last calendar quarter, Apple shipped 11.1 million iPads, which not only expanded the computing market with less need for DRAM, but also held back sales of conventional PCs. Apple actually sold more iPads than rival Dell sold in all its PCs together (10.6 million).

Michael Dell should liquidate the company and give the proceeds back to the shareholders.

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post #36 of 64
I'm willing to bet that this is one of the reasons why Wall Street will be very happy to see Apple fail and why there is so much anti-Apple hate in the media. There's always this undertone of Apple device-based component supply chain disruptions and Apple failing to meet analysts' expectations, no matter how many products they sell. This despite Apple numbers eating into many other computer manufacturers' sales numbers. No doubt there are plenty of hedge funds that are being hurt by Apple causing a shift in traditional computing. Honestly, Apple should be given far more credit of changing the computer industry and its share price should reflect Apple's leadership strength.

Instead Wall Street is constantly saying that Apple is pretty much doomed to failure due to the likelihood of being undercut in prices and easily being copycatted by other computer manufacturers. I'm always hearing how Apple's iPad is going to be a failure in the long run due to not being versatile enough when compared to traditional computing platforms. Apple is clearly disrupting the computer industry but there are so many suspicious factions either trying to downplay the situation or they're actively trying to take Apple down in order to remove the company's from its leadership position. Apple shareholders are definitely not getting back what Apple is taking from the rest of the computer industry. Apple and shareholders are clearly getting disrespected by Wall Street in order to stop Apple from getting any wealthier and even more powerful.
post #37 of 64
so much for the "Media tablet" and "iPad is not a computer" arguments
post #38 of 64
Quote:
Originally Posted by winstein2010 View Post

The DRAM's are not separate chips, they are part of the A5 chip.

Wrong. They are seperate chips that are integrated into the A5 (and A4) package

Quote:
There is no additional cost for Apple in the iDevices unlike the Desktops or Laptops.

Wrong again. Memory is not manufactured by Apple, they buy it from multiple suppliers and that is reflected on the packaging of the A4 and A5

Here, this might help you: http://www.anandtech.com/show/4971/a...-att-verizon/5

Quote:
Also, Windows 7 and Lion are not requiring more DRAM to run optimally.

Meh - you can never have enough RAM IMNSHO. I think overall sales are simply down. Some is the economy, some is the iPad - and I think the hard drive shortage will make it worse. If it accelerates flash production and thus SSD pricing, then bravo!
post #39 of 64
Quote:
Originally Posted by DocNo42 View Post

WMeh - you can never have enough RAM IMNSHO. I think overall sales are simply down. Some is the economy, some is the iPad - and I think the hard drive shortage will make it worse. If it accelerates flash production and thus SSD pricing, then bravo!

Note that they didn't say that sales were down - at least not in GB terms. I'd be willing to bet that the amount of RAM sold is still increasing (after all, PC sales are increasing (albeit slowly) and the amount of RAM per PC is going up, as well).

All that has happened is that sales haven't increased fast enough to use up the excess capacity that they built. Typical poor planning from cyclical businesses.

I agree that it's time that Flash RAM production needs to increase. Tablets are eating up huge quantities which is preventing SSD prices from dropping they way they should as the industry matures. Hopefully, switching some DRAM production to Flash will help.
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post #40 of 64
Quote:
Originally Posted by Apple ][ View Post

The average Android user most likely spends less than $40 for a date night.

A lovely and intimate dinner for two can be had at the local McDonald's for around $10.00. Within this romantic environment, the Fandroids can also bring free coupons that they have collected so that they can get a free large sized coke to go along with their meal. Going to a real restaurant is too overpriced and not a good value for a Fandroid's wallet. It's all about the price for a Fandroid.

Why should I buy an iPad when I can get something else that only costs $200? The both have screens, so they're practically the same thing.

Why should I bring my girlfriend to Smith & Wollensky's, when I can just bring her to McDonald's. They both serve hamburgers, and they're practically the same thing.

That, ladies and gentlemen, is the mentality of a Fandroid.

Couldn't help turning an actual discussion on these boards into an anti-Android rant huh child?

Learn some self control.
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