The following column was provided by Nam Hyung Kim, a principal analyst with iSuppli Corp., an El Segundo, California-based market research firm.
In a market characterized by rapid change, 2003 was a year of relative stability for the DRAM business, with the ranking of the top five players, the mainstream density and the most common part type remaining the same as they were at the end of 2002.
Ranked by revenue, the top-five DRAM sellers in 2003 were Samsung, Micron, Infineon, Hynix and Nanya -- the same as in 2002, according to iSuppli Corp.'s final 2003 market share estimate. The 256-Mbit density remained dominant in 2003, with the market penetration of next-generation 512-Mbit parts limited to only 1.7 percent of total shipments. Double Data Rate (DDR) SDRAM retained the overwhelming market share it built up by the end of 2002, with 76.3 percent of total DRAM shipments.
However, there were a few notable changes in the DRAM market in 2003. For one, Hynix Semiconductor Inc., which has faced a host of legal, financial and competitive struggles in recent years, came roaring back in 2003. For another, China finally emerged as a major regional DRAM market.
The DRAM market also exhibited healthy growth in 2003, with worldwide revenue rising 12 percent to reach $17.3 billion. Suppliers shipped 3,384 million 256Mbit-equivalent DRAM units, up 48 percent from 2002.
Name, rank and revenue number
The table presents iSuppli's ranking of the top DRAM suppliers in 2003.
Samsung's revenue decreased by 0.8 percent in 2003, due to the company's shift of production from DRAM to more profitable NAND flash parts. Nanya's DRAM share fell by 5.8 percent because of its slower-than-expected migration to 0.11-micron process technology.
Infineon Technology AG's sales increased by 43 percent, the best performance among the top five suppliers in 2003. Despite unfavorable circumstances, Hynix grew its sales by 30 percent. Accordingly, both companies increased their market share, with Infineon's rising 3.5 percent and Hynix's growing 2 percent.
Number-eight supplier Powerchip generated the second-strongest growth of all the major DRAM suppliers, with a 79 percent increase compared to 2002. Powerchip achieved the best operating margin of all the Taiwanese suppliers in the fourth quarter due to its successful ramp up of 300mm wafer production.
Among the top 10 DRAM makers, Mosel Vitelic Inc. achieved the strongest growth, with its sales rising 141.1 percent in 2003. However, much of that growth was due to a change in the ownership of ProMos Technologies Inc., a joint venture established by Mosel Vitelic and Infineon. ProMos previously sent a portion of its output to Infineon. However, Mosel Vitelic during 2003 took on 100 percent of the DRAM output of ProMos, dramatically boosting its DRAM sales.
Winbond's sales decreased by 33 percent as it prepared to exit the DRAM market, causing its share to fall by 1.2 percent. Japanese DRAM supplier Oki Electronics muscled its way onto the top-10 supplier list by surpassing competitors Vanguard, Elite Semiconductor and Toshiba.
China marked a milestone in the development of its electronics industry as it gained control of 10 percent of the worldwide DRAM market in 2003, the first time the nation has taken a double-digit percentage of sales.
Including China, the Asia-Pacific region captured 41 percent of the global market, making it the largest DRAM region in the world. North America, Europe and Japan were the next-biggest DRAM regions, respectively accounting for 33 percent, 16 percent and 9 percent of global DRAM revenue.
Samsung ranked first in all regions, except China, where Hynix managed to win leadership with a 39 percent share of the market. Samsung, Micron and Infineon are engaged in a tight battle for second place in China, with shares of 20.5 percent, 16.9 percent and 16 percent respectively.
In Japan, the two Korean suppliers -- Samsung and Hynix -- dominated the market with a combined share of 43.9 percent. The only remaining Japanese commodity DRAM supplier, Elpida, captured 15.7 percent of its domestic market by focusing on customers in the consumer electronics business.
Rank by Density
Samsung and Hynix were the leaders in low-density DRAM in 2003, respectively controlling 34 percent and 21 percent of all sales of 16-Mbit DRAM. Samsung and Hynix also were the top two suppliers in the 64-Mbit DRAM market, with market shares of 31 percent and 26 percent respectively. The two companies managed to maintain a per-megabit price premium for their low-density parts compared to mainstream 256-Mbit DDR DRAM.
Micron was the leading supplier of 256-Mbit SDRAM in 2003, with 28 percent of revenues. Samsung was the number-two supplier.
In the mainstream 256-Mbit DDR SDRAM market, Samsung, Micron, Infineon, Hynix and Nanya captured 20.9 percent, 19.3 percent, 18.6 percent, 14.5 percent and 8.3 percent of worldwide sales in 2003. Despite having the highest average selling price (ASP) for 256-Mbit DDR SDRAM, Samsung captured only 20.9 percent of this segment, compared to its overall DRAM market share of 28.7 percent.
Samsung fared better in the 256-Mbit DDR SDRAM market in 2003, with a share of 36.1 percent. However, Samsung's exposure to the 256-Mbit DDR SDRAM market decreased by 15.2 percent, indicating that the company's efforts to diversify its product line have helped it to maintain a higher ASP.
Rank by part type
DDR SDRAM, including graphics DDR parts, accounted for the bulk of the major suppliers' revenue in 2003. DDR SDRAM represented 83.4 percent of Infineon's sales, 76.4 percent of Hynix's, 73 percent of Samsung's and 70.9 percent of Micron's.
The Taiwanese suppliers specialized in DDR in 2003; 97.6 percent of Nanya's and 96 percent of Powerchip's DRAM revenues in 2003 were derived from DDR. This indicates that the Taiwanese suppliers' product mix is simpler than that of the top-tier DRAM makers.
Elpida's DDR shipments reached only 62.7 percent of its total DRAM sales last year. This aligned with Elpida's consumer application-driven customer portfolio in Japan. Consumer products tend to use SDRAM as opposed to the newer DDR.
Nam Hyung Kim can be contacted at the following email address: firstname.lastname@example.org