DRAM Loses Out in Smartphone Market Growth

According to IHS, DRAM made up only 6.3 percent of the total BOM of a smartphone in Q1 2012, which is down 7.1 points from 13.4 percent during Q1 2011. Phone manufacturers spent an average of $11.81 for DRAM in the first quarter of this year, compared to $19.48 last year. IHS examined 19 different smartphone models for its report.

"Larger demands are being placed on the processing power of smartphones, in the process blurring the line between a phone and a computing device," said Dee Nguyen, memory analyst for IHS. "As this has happened, DRAM has become an increasingly crucial component of the handset supply chain. The growing importance of DRAM, however, appears not to be correspondingly reflected in the total BOM cost of a smartphone given the memory’s declining share."

Interestingly, memory makers are supplying significantly more memory for fewer dollars. IHS said that the average memory amount was 256 MB in Q1 2010, while the average in Q1 2012 was 800 MB. Average selling prices for low-power DDR2 (LPDDR2) DRAM retreated by 48 percent from $2.59 to $1.34 during 2011.

"Because of the extensive application processing requirements of the modern smartphone, handset manufacturers can throttle DRAM loading by only so much before risking lower performance," Nguyen said. "As a result, handset manufacturers will have little choice but to continue moving up the DRAM technology and density curve, which could then enable the memory to take a greater share of total smartphone BOM costs."

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  • ojas
    So now phones will come with 2GB min?
  • A Bad Day
    ojasSo now phones will come with 2GB min?

    I doubt it. There will always be products that have cheaped-out components that barely meet minimal requirements.
  • eddieroolz
    Considering the average phone has somewhere between 512 and 1GB of RAM, the 800MB average sounds right.