Asia Memory-Bad memories fading

TMT
Memory Devices Technology
8 October 2010
abc
Tablet PC DRAM MB bn, % of total DRAM demand
150
100
50
-
2009 2010f 2011f 2012f
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
PC unit shipments, including tablet
600
500
400
300
200
100
0
2009 2010f 2011f 2012f
Tablets
% of total
DT PC NB PC Tablet
Source: HSBC estimates
Source: IDC, HSBC estimates
Tablets – about 5% global DRAM
cannibalisation
Tablets are a good thing, we concluded for NAND
demand. Unlike netbooks, tablets by their very
nature demand NAND as the primary storage
device. But an emerging concern for commodity
DRAM is that tablets will cannibalise netbook and
notebook sales, reducing overall DRAM demand.
How big is the threat? On the face of it, tablet’s
potential impact on notebook demand could be
substantial; Best Buy estimates that the iPad
cannibalised laptop PC sales by up to 50% in its
last reporting quarter. In our forecast, we calculate
1%, 5% and 5% cannibalisation impact on global
DRAM demand for 2010-12e. This could rise if
cannibalisation reaches the sort of levels that Best
Buy is eluding to. DRAM vendors that can supply
low-voltage, low-power DDR (and increasingly
DDR2) that could be integrated into tablets stand
to benefit, or could offset some of the declines in
commodity DRAM demand.
In terms of units, we estimate tablets to account
for c7.6% of tablets plus notebooks this year. We
forecast tablet shipments to soar to 73m units next
year, accounting for a quarter of our forecast
tablets plus notebooks. We assume netbooks and
CULV notebooks will see negative unit shipment
growth, and that regular notebook growth will
slow to c16.7% y-o-y.
We estimate blended notebook plus netbook
DRAM content/box of 2.7GB this year, with
netbooks averaging a little over 1GB. In contrast,
Apple’s iPad, Samsung’s Galaxy Tab and
Toshiba’s Folio 100 have paltry DRAM content –
256MB, 512MB and 512MB respectively. The
cannibalisation impact will really start to be felt
next year, when we estimate tablets will account
for 26% of tablet plus notebook units but only
c6% of tablet plus notebook DRAM bits. We
estimate the impact of tablet cannibalisation to be
around 1% of total global DRAM demand this
year, but rising to c5% for 2011-12e. In this
estimation we used the following assumptions:
We estimate tablet unit shipments to rise to
73m units next year and 102m units by 2012e.
HSBC’s regional hardware analyst, Wanli
Wang, expects ten vendors to launch tablet
products next year. He expects notebooks to
drive PC demand in 1H and tablets to drive
demand in 2H. ARM estimates there will be
40 tablet devices using ARM-based
processors this year.
We expect DRAM content in tablets to start
rising quickly next year to support multitasking
and more resource-intensive apps. We
think this is doable, given DRAM is only c3%
of BOM for current Apple iPads. We think 5-
6% is more likely next year as 512MB
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