What You Don’t Know About Consumer Memory

I hear a lot of chatter about the memory markets and their fast growth. The question I like to pose to people is, “Which memory (DRAM) segment has grown faster over the last three years, servers or consumer?”

The answer may surprise you.

The correct answer, according to the latest IHS DRAM Market Tracker Database, is consumer. Since the beginning of 2012, the consumer DRAM market has grown by 145%, while Server DRAM has “only” grown by 107%. The more interesting question is really, “What is driving the growth of consumer DRAM?”

DRAM consumption in the consumer market is driven by three primary applications: digital TV, set-top boxes, and video game consoles. The TV and set-top box markets have similar characteristics: unit sales that grow slowly over time and DRAM amounts that grow at rates of about 20% per year. These applications contributed to the large uptick in consumer DRAM, but pale in comparison to the recent contributions from the video game console application.

In late 2013, both Sony and Microsoft introduced new video game platforms, the first major overhaul in seven years. As you may imagine, similar to other semiconductor-based applications, the processor and graphics capabilities made huge leaps in this timeframe, requiring a large increase in the amount of memory per system.

For the previous generation of platforms, both the Xbox 360 (introduced November 2005) and PlayStation3 (introduced November 2006) featured 512 MB of total memory. In the updated versions that were introduced last year, both featured 8 GB of memory. This video game console memory increase correlates to an average of 49% per year, but came in the form of one very large step, rather than a little bit each year. As a comparison for the similar timeframe, notebook memory use increased 22% per year, server memory use increased 34% per year, and high-end phone/smartphone memory use increased 72% per year.

Coupled with the major upgrade in video game console performance is an increase in unit sales, as patrons could finally get an upgrade in their gaming experience. It’s this combination of increased sales and the large increase in memory per system that enables the consumer memory market to keep pace with the likes of mobile and servers. Should we check-in on this same subject in about six years, and see if history repeats itself?

The DRAM industry is not a one-trick pony. Revenue is growing and profits are up. The DRAM market is firing on all cylinders…What a ride!