Jan. 13, 2009 – 2008 was a big game of “chicken” in the DRAM sector, as firms floored their investment and output pedals in 2008 hoping competitors would give up first. But all they did was make the bad times last longer, according to a summary from iSuppli.

Global revenue fell by nearly 20% in 2008 to $25.2B, following a 7% slide in 2007 — the market lost a third of its value over two years. But the steep dropoff “won’t mark an end to the memory sinkhole,” the analyst firm warns, projecting a 4% decline in 2009 as well, citing “global economic uncertainty.” The top 8 DRAM suppliers have lost nearly $8B in the past two years, notes analyst Nam Hyung Kim, and will tally $11B in operating losses by the end of 2009.

Suppliers’ rapid reduction in capacity growth should help the industry find a bottom and start to recover by 2H09, as prices stabilize and suppliers’ losses slowly shrink. iSuppli projects two years of growth in the teens in 2010-2011 before another downswing. But until then, “the game of chicken has turned into a game of survival,” Kim notes.

Global DRAM market revenue and growth estimates and forecast. (Source: iSuppli)