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Electronics Production | February 09, 2011

Worldwide DRAM revenue declined by 20% in 4Q10

DRAM industry revenue decreased by 20% from USD 10.78 billion to USD 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 USD 40 to USD 24. 4Q10 DDR3 1Gb 1333MHz spot price declined by 37% to USD 1.51 while DDR2 1Gb 800MHz decreased by 22% to USD 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 USD 12 billion to USD 6.8 billion. Also, DRAM vendors are actively adjusting their product mix and decreasing commodity DRAM output.

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%.

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