iSuppli sees a 15% drop in DRAM revenue for 2009. We think that the numbers could end up being far worse. The past shipments measured were basically flat, but average selling prices were off 38%.
This put Q4 revenues at roughly $4.2 billion, much lower than the $5.8 billion projections. This shortfall puts 2008 figures at $23.6 billion. That is down about 25% from 2007, so you can see how much the drop off was in Q4.
iSuppli’s prediction is for roughly $20 billion in annual DRAM revenue. Just last month, the group was looking for a 4% drop. What is almost funny is that this is still on shipment growth. It seems all the cheap computing demands are still in demand, but so much for pricing power. And so much for margins.
Because of this and other reasons, we have three tech stocks in this week’s “10 Stocks Under $10” subscriber letter. We do have some trading buys we have just taken profits in there, but the metrics that have started mounting up against the high-end of the market along with a crashing global economy does not leave us any comfort for what lies ahead in 2009.
Jon C. Ogg
February 9, 2009
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