The DRAM market continues its march into the post-PC era, as revenues for DRAM in mobile applications reached $1.85 billion in the second quarter of the year, or 26% of the overall DRAM market, up $20 million quarter over quarter according to IHS iSuppli. Granted, the quarter-to-quarter jump represented only about a percent change, but also marks the fourth straight quarter of growth for the mobile DRAM market. Perhaps more significant, it comes at a time that the overall DRAM market is busy shrinking.
Indeed, mobile DRAM appears to be a bright spot in the market, while commodity DRAM is going through its usual sorts of price swings—dropping by as much as 50% from Q2’11 to Q4’11, according to the report. “Mobile DRAM tends to be priced according to manufacturing cost, not based on the general balance between supply and demand,” says analyst Mike Howard. “As a result, DRAM companies are able to earn a more reasonable margin for their mobile memory products—unlike in commodity DRAM, where negative margins are frequently the rule.”
As far as rankings go, Samsung Electronics led the market with 61% of the mobile DRAM market in the second quarter, corresponding to sales of $1.1 billion, up 35% compared to the previous year. SK Hynix Semiconductor followed in the two hole with sales of $362 million, or around 20% of the total market, a 4% drop from the year-earlier period. Elpida Memory and Micron Technology, soon to be a combined entity, logged revenues of $245 million and $79 million, respectively, corresponding to 14% and 4% of the market. Elpida, whose high-quality mobile memory product is considered a key motivation for the Micron buy
, bumped its market share by 12% over the previous quarter compared to Micron, whose share dropped by 30%.
Meanwhile, the LPDDR derby continues with LPDDR2 shipments rising to 60% of the total mobile DRAM volume as prices in Q2 dropped to around the level of LPDDR1. Look for the LPDDR2 piece of the market to rise to 70% in 2013, according to the DRAMeXchange. With the official release
earlier this year of the LPDDR3 standard, LPDDR3 products should begin to gain a toehold in the market but aren’t expected to go mainstream until the second half of 2014. DRAMeXchange analysts expect the shift to dual- and quad-core processors in mobile handsets to drive demand toward LPDDR2, dropping the LPDDR1 segment of the mobile DRAM market to as low as 20%.
The outlook for commodity DRAM is less rosy. According to TrendForce, notebook and PC shipments have slowed, dragging the price for 4 GB modules to as low as $15.75, although 2 GB module prices remained stable at $9.25. “Due to macroeconomic influences, DRAM makers’ chip prices are either approaching or have already broken cash cost, but demand has yet to pick up,” the report says. “DRAM suppliers’ plans to reallocate PC DRAM capacity have been disrupted, as the market remains in oversupply.”
It's a challenging time for DRAM—do you see the overall market stabilizing by next summer or do you think we'll continue to have a rocky year all 2013?
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