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DRAMeXchange: Worldwide DRAM revenue declined by 20% in 4Q10


8 February 2011 Semiconductors

DRAMeXchange: Worldwide DRAM revenue declined by 20% in 4Q10

Feb. 8th, 2011--According to DRAMeXchange  (a research division of TrendForce), DRAM industry revenue decreased by 20% from $10.78 billion to $8.64 billion due to a 40% drop in DRAM contract price, despite of a 16% QOQ (quarter on quarter) DRAM output increase in 4Q10.

4Q10 DRAM contract price declined as the production technology smoothly migrated to 50nm and 40nm. This transition enabled a 16% increase in output. With a limited content growth and a relatively poor sale, PC-OEMs cannot consume their large DRAM inventory. This situation is an over-supply. 4Q10 DDR3 2GB average contract price dropped 40% from $40 to $24. 4Q10 DDR3 1Gb 1333MHz spot price declined by 37% to $1.51 while DDR2 1Gb 800MHz decreased by 22% to $1.57.

Impacted by the decreasing 4Q10 DRAM prices, other than Korean and American DRAM vendors, the rest of worldwide DRAM vendors reported losses. Therefore, DRAM vendors are becoming more conservative in capital expenditure. According to DRAMeXchange, 2011 DRAM capital expenditure dropped by 43% year over year from previously $12 billion to $6.8 billion. Also, DRAM vendors are actively adjusting their product mix and decreasing commodity DRAM output.

Worldwide DRAM revenue ranking by own brand

In terms of own brand revenue, Samsung’s revenue surpassed other DRAM vendors and slightly grew 0.3% QOQ. Samsung remained with 40% of market share despite of a 20% decline in 4Q10 revenue QOQ due to the dropping DRAM price. Samsung outperformed other competitors in 35nm technology migration and expected to adapt over 50% by the end of year. Hynix also increased its market share from 19.8% to 21.9%. Hynix increased production in mobile DRAM and server-basis DRAM and decreased their production in commodity DRAM. Hynix DRAM revenue decreased relatively small, an 11.5% QOQ despite a sharp decrease in DRAM price.

Elpida 4Q10 revenue decreased 32% QOQ and its market share decreased from 16.1% to 13.6%. PSC outsourced its entire commodity DRAM to Elpida and resulted in a strong incentive for revenue growth. With a successful 45nm migration, its subsidiary, the yield rate of Rexchip facility reached 91%. The 38nm migration will be expected after Chinese New Year to further decrease costs. Micron 4Q10 revenue shrunk by 19% while sustained its 12% market share with a mere 5% DRAM shipment growth and a 23% decline in DRAM average selling price.

As for Taiwanese vendors, Nanya reported a 19% decline in 4Q10 revenue and sustained a 4.2% market share. Nanya supply bit growth sharply increased 35% QOQ benefited from an improving yield rate and from its OEM partner, Inotera. Impact by a 37% spot price decline QOQ, 4Q10 PSC revenue dropped 29.9% QOQ to $193 million. PSC announced to reposition itself as a professional foundry company and will gradually resign from DRAM own brand market. Commodity DRAM output will be solely sold by Elpida and PSC and will concentrate on Flash and foundry business. Winbond with a 3.7% decline in revenue QOQ had resigned from the commodity DRAM market and shifted focus onto specialty DRAM and NOR Flash. With little impact from commodity DRAM, Winbond indicated that they will be cautiously optimistic toward the future business development. (Figure-1)

Market Share of own brand DRAM revenue by country

In terms of market share by country, Korean vendors’ market share reached 63.7% and remained first place in DRAM industry. American and Taiwanese DRAM makers’ market shares remained at 12.2% and 10.3% respectively. Lastly, the market share of Japanese DRAM vendors declined to 13.8%. (Figure-2)


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