The growth is expected to be driven by new capacity installs in 2015.

A study by SEMI researchers says new capacity installs in 2015 will grow the industry next year for the first time since the 2008/2009 financial crisis. To give a sense of the contraction, in 2007, there were 11 major companies producing DRAM in 40 facilities; industry consolidation and conversion of fabs to flash memory or other purposes has reduced this to six companies and 20 facilities. Because of this, wafer production capacity has dropped by about 25 percent since 2010.

This contraction is finally set to change in 2016, due to investments by companies into 3-4 newer technology fabs. While ‘newer technology’ generally means more competitive chips, SEMI noted that the increased complexity means that there are 10-20 percent fewer wafers produced per square foot of cleanroom at process sizes of 30/28nm and below. Given that most companies are at the 21/20nm level now (with some at 15nm), 2016 is expected to see a modest 3 percent increase in DRAM capacity despite the investment. This brings the industry’s growth back to roughly 2014 levels.

Nevertheless, any capacity increase is a welcome sign that the industry is beginning to recover. According to SEMI, demand for DRAM is increasing in the mobile and infrastructure/server segments, with one leading manufacturer predicting CAGR of 27 percent from 2013-2017. At least according to SEMI, the industry has finally hit rock bottom, and prospects for recovery seem high.