Elpida’s DRAM Sales Soar in Q2
Japan’s Elpida Memory Inc. was the star of the global DRAM market in the second quarter, with a robust increase in its pricing causing its revenue to surge by 50 percent from the first quarter, according to iSuppli Corp.
Elpida posted the strongest performance among the Top-5 DRAM suppliers in the second quarter, with revenue rising to $745 million, up from $497 million in the first quarter. Company performance was boosted by a robust 32 percent rise in its DRAM Average Selling Price (ASP) in the second quarter compared to the first.
“Elpida accomplished its strong increases in revenue and pricing by expanding its specialty DRAM sales to mobile and consumer applications,” said Nam Hyung Kim, director and chief analyst for memory ICs and storage at iSuppli. “These specialty DRAMs command higher prices than commodity parts, allowing Elpida to outperform its competitors.”
The news comes amid a strong performance for the overall DRAM market, with revenue reaching $4.5 billion in the second quarter, up 34 percent from $3.4 billion in the first quarter. This contrasts with a 19 percent decline in the first quarter. Due to a shortage in DDR3 parts and to buyers’ inventory re-stocking efforts, the per megabyte of ASP DRAM jumped by 18 percent, an unusual increase for a market that customarily sees its prices decline during each quarter.
This was much higher than Samsung 1,540 34.1% 1,141 35.0% 2,054 -25.0% iSuppli’s previous forecast of a 2.6 percent increase.
This was much higher than Samsung 1,540 34.1% 1,141 35.0% 2,054 -25.0% iSuppli’s previous forecast of a 2.6 percent increase. Megabyte¬ equivalent unit shipments also grew by 14 percent, surpassing iSuppli’s estimate of 6.2 percent and resulting in a dramatic improvement to the market overall. The other big winner during the second quarter was Taiwan’s Winbond Electronics Corp., whose revenue doubled, rising to $87.6 million, up from $44 million in the first quarter. Winbond’s brand name has been largely unknown overseas due to its small size and strong focus on specialty DRAM.
Furthermore, Winbond’s foundry sales to Qimonda have been suspended due to Qimonda’s bankruptcy. The company had been selling DRAM previously owned by Qimonda under its own brand, causing its second-quarter unit shipments to rise by nearly 200 percent compared to the first quarter.
iSuppli believes that Winbond will continue to strengthen its DRAM operations, finding more clients for its memory and licensing the graphic DRAM business from Qimonda.
Tier-1 Results Mixed
Among the other Tier-1 suppliers, results were mixed. The Top-2 South Korean companies—Samsung Electronics Co. Ltd. and Hynix Semiconductor Inc.—captured 55.9 percent of the global market, with DRAM sales for each company increasing sequentially by more than 30 percent during the second quarter.
Micron Technology Inc. of the United States saw its share of DRAM revenue dip to 13.9 percent in the second quarter, down from 14.3 percent in the first quarter, owing to the very strong sales growth of the other Tier-1 DRAM suppliers. However, Micron’s second-quarter revenue declined by only 15.2 compared to the same period in 2008, the lowest level of decrease among the Top-10 DRAM suppliers in the second quarter.
Taiwan’s Nanya Technology Corp. also performed relatively well on the year-over-year comparison, with only a 15.4 percent decline in revenue.
The relatively limited declines of Micron and Nanya, which recently entered a partnership, showed that the companies are seriously striving to increase their scale to become more competitive in the market.
Qimonda, not surprisingly, dropped from the Top-10 list after it went bankrupt and sold most of its inventory during the first quarter.
DDR3 Shortage Continues Until the End of the Year
iSuppli believes that the recent shortage of DDR3 DRAM will persist through the end of this year.
Limited capital investments will continue to delay the migration to the 5x nanometer process until the first quarter of 2010. Until that time, DDR3 supply will continue to be tight in the market.
The DDR3 shortage recently has been making PC OEMs panic. A few OEMs are considering reducing their DDR3 adoption by returning back to DDR2 as most of Intel’s current chipsets still support dual modes (i.e. DDR2 and DDR3). The momentum of the price increases will definitely decelerate. However, tight supply will persist and PC OEM’s profit margins are expected to be challenged in the second half of 2010.
Elpida posted the strongest performance among the Top-5 DRAM suppliers in the second quarter, with revenue rising to $745 million, up from $497 million in the first quarter. Company performance was boosted by a robust 32 percent rise in its DRAM Average Selling Price (ASP) in the second quarter compared to the first.
“Elpida accomplished its strong increases in revenue and pricing by expanding its specialty DRAM sales to mobile and consumer applications,” said Nam Hyung Kim, director and chief analyst for memory ICs and storage at iSuppli. “These specialty DRAMs command higher prices than commodity parts, allowing Elpida to outperform its competitors.”
The news comes amid a strong performance for the overall DRAM market, with revenue reaching $4.5 billion in the second quarter, up 34 percent from $3.4 billion in the first quarter. This contrasts with a 19 percent decline in the first quarter. Due to a shortage in DDR3 parts and to buyers’ inventory re-stocking efforts, the per megabyte of ASP DRAM jumped by 18 percent, an unusual increase for a market that customarily sees its prices decline during each quarter.
This was much higher than Samsung 1,540 34.1% 1,141 35.0% 2,054 -25.0% iSuppli’s previous forecast of a 2.6 percent increase.
This was much higher than Samsung 1,540 34.1% 1,141 35.0% 2,054 -25.0% iSuppli’s previous forecast of a 2.6 percent increase. Megabyte¬ equivalent unit shipments also grew by 14 percent, surpassing iSuppli’s estimate of 6.2 percent and resulting in a dramatic improvement to the market overall. The other big winner during the second quarter was Taiwan’s Winbond Electronics Corp., whose revenue doubled, rising to $87.6 million, up from $44 million in the first quarter. Winbond’s brand name has been largely unknown overseas due to its small size and strong focus on specialty DRAM.
Furthermore, Winbond’s foundry sales to Qimonda have been suspended due to Qimonda’s bankruptcy. The company had been selling DRAM previously owned by Qimonda under its own brand, causing its second-quarter unit shipments to rise by nearly 200 percent compared to the first quarter.
iSuppli believes that Winbond will continue to strengthen its DRAM operations, finding more clients for its memory and licensing the graphic DRAM business from Qimonda.
Tier-1 Results Mixed
Among the other Tier-1 suppliers, results were mixed. The Top-2 South Korean companies—Samsung Electronics Co. Ltd. and Hynix Semiconductor Inc.—captured 55.9 percent of the global market, with DRAM sales for each company increasing sequentially by more than 30 percent during the second quarter.
Micron Technology Inc. of the United States saw its share of DRAM revenue dip to 13.9 percent in the second quarter, down from 14.3 percent in the first quarter, owing to the very strong sales growth of the other Tier-1 DRAM suppliers. However, Micron’s second-quarter revenue declined by only 15.2 compared to the same period in 2008, the lowest level of decrease among the Top-10 DRAM suppliers in the second quarter.
Taiwan’s Nanya Technology Corp. also performed relatively well on the year-over-year comparison, with only a 15.4 percent decline in revenue.
The relatively limited declines of Micron and Nanya, which recently entered a partnership, showed that the companies are seriously striving to increase their scale to become more competitive in the market.
Qimonda, not surprisingly, dropped from the Top-10 list after it went bankrupt and sold most of its inventory during the first quarter.
DDR3 Shortage Continues Until the End of the Year
iSuppli believes that the recent shortage of DDR3 DRAM will persist through the end of this year.
Limited capital investments will continue to delay the migration to the 5x nanometer process until the first quarter of 2010. Until that time, DDR3 supply will continue to be tight in the market.
The DDR3 shortage recently has been making PC OEMs panic. A few OEMs are considering reducing their DDR3 adoption by returning back to DDR2 as most of Intel’s current chipsets still support dual modes (i.e. DDR2 and DDR3). The momentum of the price increases will definitely decelerate. However, tight supply will persist and PC OEM’s profit margins are expected to be challenged in the second half of 2010.
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