El Segundo, Calif. — The global DRAM market reached $4.5 billion in the second quarter, up 34 percent from $3.4 billion in the first quarter, according to a second quarter DRAM report from iSuppli Corp. This contrasts with a 19 percent decline in the first quarter compared to the fourth quarter of 2008, said the market researcher. Unit shipments of DRAM also grew by 14 percent, surpassing iSuppli’s estimate of 6.2 percent.
A shortage in DDR3 parts and inventory re-stocking efforts by buyers drove per megabyte pricing up by 18 percent in the second quarter, said Nam Hyung Kim, director and chief analyst for memory ICs and storage at iSuppli. He said this is “an unusual increase for a market that customarily sees its prices decline during each quarter.” iSuppli previously forecast a 2.6 percent increase for the second quarter.
iSuppli believes that the recent shortage of DDR3 DRAM will continue through the end of this year. The market researcher says limited capital investments will continue to delay the migration to the 5x nanometer process until the first quarter of 2010, and until that time, DDR3 will be in tight supply.
As a result of the shortage, PC OEMs are rethinking their DDR3 adoption by converting back to DDR2 as most of Intel’s current chipsets still support dual modes (DDR2 and DDR3), said iSuppli. Although price increases are expected to slow, profit margins at PC OEMs will be challenged in the second half, said Kim.
iSuppli’s report, Preliminary DRAM Market Share for Q2, shows that Elpida Memory Inc. in Japan posted the strongest performance among the Top 5 DRAM suppliers in the second quarter, with revenue reaching $745 million, up from $497 million in the first quarter. The market researcher attributes the boost to a 32 percent increase in average selling prices (ASPs) for DRAMs in the second quarter, compared to the first quarter.
“Elpida accomplished its strong increases in revenue and pricing by expanding its specialty DRAM sales to mobile and consumer applications,” said Kim. “These specialty DRAMs command higher prices than commodity parts, allowing Elpida to outperform its competitors.”
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.
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, said iSuppli.
Micron Technology Inc. in the U.S. saw its share of DRAM revenue dip to 13.9 percent in the second quarter, down from 14.3 percent in the first quarter, due to strong sales growth of other Tier 1 DRAM suppliers. However, Micron’s second-quarter revenue declined by 15.2 compared to the same period in 2008, the lowest level of decrease among the Top 10 DRAM suppliers in the second quarter, according to iSuppli.
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,” Kim said.