SAN FRANCISCO—Despite an 8.9 percent DRAM revenue decline compared to the third quarter, South Korea's Samsung Electronics Co. Ltd. held a record 45 percent market share in DRAM in the third quarter, according to market research firm IHS iSuppli.
Samsung (Seoul, South Korea), the No. 1 supplier of DRAM for some time, expanded its market share by 3.5 percent compared to the second quarter, handily outperforming the industry as a whole in the third quarter, according to IHS.
"Samsung perennially has the DRAM industry’s largest capital expenditure budget, allowing it to reduce costs and offer advanced products more quickly than the competition," said Mike Howard, principal analyst for DRAM and memory at IHS, in a statement. “Because of this, the company was better able to absorb the decline in average selling prices (ASP) in the third quarter, which fell 26 percent for the DRAM industry as a whole."
According to Howard, Samsung's DRAM ASP fell by just 17 percent in the third quarter, while its shipments increased by 9 percent. "With these advantages, the South Korean electronics giant was able to expand its DRAM market leadership to the highest margin in company history," Howard said.
Samsung’s share of DRAM market revenue has been rising steadily in recent years, growing from 28 percent in 2007 to 30 percent in 2008, to 34 percent in 2009 and 37 percent in 2010, according to IHS.
The 26 percent ASP decrease for the overall DRAM market in the third quarter compares to an average quarterly decline of 2 percent since the beginning of 2009. The extraordinarily weak pricing caused DRAM industry revenue in the third quarter to decline by 15.8 percent to $6.8 billion, down from $8.1 billion in the second quarter, IHS said.
"DRAM demand in the third quarter was undercut by anemic sales of PCs—which represent the primary market for the memory type," Howard noted. "The consumer appetite for PCs has been dampened by weak economic conditions combined with competition from media tablet devices."
U.S.-based Micron Technology Inc. posted an even better performance than Samsung in the third quarter, IHS said. Micron's DRAM sales fell by only 3.8 percent sequentially in the third quarter, while the company increased its DRAM market share to 12.1 percent from 10.6 percent in the second quarter, IHS said.
The third quarter performance by No. 4 ranked DRAM vendor Micron was enough to put it in a virtually tie with the No. 3 vendor, Japan's Elipda Memory Inc., which saw its DRAM market share decline from 12.1 percent in the third quarter from 14.6 percent in the second quarter, according to IHS. Elpida’s shipments were up 16 percent in the third quarter, but its ASP plummeted a steep 39 percent, IHS said.
Like Elpida, second-place Hynix Semiconductor Inc. of South Korea suffered a loss of market share in the third quarter. With revenue of $1.5 billion, Hynix had 21.5 percent share, down from 23.4 percent, IHS said. Hynix's ASP fell faster than the industry average, sinking 29 percent during the period, IHS said.
Fifth-ranked DRAM vendor Nanya Technology Corp. of Taiwan saw its third quarter market share decline to 3.6 percent from 4.7 percent in the second quarter— a significant drop largely driven by the supplier’s relatively weak ASP, which fell 32 percent, IHS said. Nanya’s shipment growth of 7 percent also was slightly lower than the industry average of 13 percent, IHS said. Nanya continues to be heavily exposed to the commodity DRAM market and will find the next few quarters an uphill climb, especially as this segment is expected to remain in a slightly oversupplied position, according to IHS.
Rounding out the Top 8 were Winbond Electronics Corp., one of the few market share gainers along with Samsung and Micron, in sixth place; ProMOS Technologies Inc., down to less than 1 percent share; in seventh place; and Powerchip Technology Corp., rebounding after not shipping any branded DRAM in the second quarter, in eighth, IHS said. All three companies are based in Taiwan.
I think DRAM prices seems to bottomed out. In recent past PC sales got hit hard due to lower HDD supply and causing DRAM makers to cut down inventory level. Once HDD supply constraint will over, PC sales will be back to normal, DRAM ASPs will move northward.