DRAM consumption is being disrupted

The PC is still alive and it still needs to be stuffed with DRAM. Over the last few years, the DRAM market has been in balance as the decline in PC and the Enterprise data centre was balanced out with increasing sales of DRAM to mobile applications. A few quarters ago, the market was caught by surprise by the rapid and relentless rise of the Cloud data centre. A move to the cloud should in principle be memory neutral, but it is not. Where the enterprise treats memory as cost and wants to limit it, the cloud data centres are used by companies drilling for the new oil: Big Data. To drill you need parallel processing power (like Nvidia’s GPU’s) and massive amounts of memory, DRAM in particular. The memory companies are all investing in additional capacity but it will take time to come online. In the mean time, the wolves will have to fight over the limited supply and it looks like the Data Center wolf is the strongest as data centre decisions are based on long term capital investments and not consumer decisions.

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