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Analysis |

Global mobile DRAM industry sees 7.7% revenue growth in Q2

According to the latest analysis by DRAMeXchange, a division of TrendForce, global mobile DRAM revenue reached US$3.851 billion in the second quarter, a 7.7% increase versus the prior period.

The percentage of mobile DRAM revenue within the total DRAM sales also rose to 33.7% and is expected to keep rising. The revenue growth is due to mobile DRAM being relatively resistant to price decline compared with other types of DRAM. Another factor is that the next generation of LPDDR4 has raised the average selling price of mobile DRAM. “South Korean supplier Samsung remained main driver of bit shipment growth for mobile DRAM in the second quarter,” said Avril Wu, Assistant Vice President of DRAMeXchange. “By equipping its flagship smartphones Galaxy S6 and S6 Edge with 3GB LPDDR4, Samsung significantly raised shipments of its own mobile DRAM to about 40% of its total DRAM shipments during the same period. Correspondingly, PC DRAM’s percentage in Samsung’s total DRAM shipments has been reduced to a low 20%.” Prices for DRAM products, particularly PC DRAM, are expected to continue dropping. The average contract price fell considerably by 15% in July, and the decline is forecast to approach 30% in the third quarter, rapidly eroding DRAM makers’ profits. Samsung has already decided to temporarily decrease PC shipments in favor of shifting capacity to mobile DRAM. It hopes LPDDR4 shipments will increase with the arrival of the next iPhone. At the same time, Samsung also intends to increase its market share among other mobile DRAM clients. “Samsung’s strategy is likely to succeed and will further narrow the profit margins of its competitors because it has the technological advantage as well as comprehensive product lines,” said Wu. “In this DRAM market downturn, the competitive gaps among suppliers are expected to widen.” With prices of PC DRAM declining rapidly, mobile DRAM becomes critical to maintaining profitability Benefitting from Galaxy S6 shipments, Samsung’s mobile DRAM revenue reached US$2.219 billion in the second quarter, a 19.1% increase compared with the prior period. Samsung currently has the highest LPDDR4 production ratio and is manufacturing on the most advanced process, the 20nm. It therefore has maintained a high profitability and is expected to supply most of LPDDR4 for the next iPhone. With prices fluctuating rapidly in the second quarter, producing mobile DRAM has become more profitable than producing PC or server DRAM. From this perspective, Samsung will probably continue reallocating capacity to mobile DRAM production for at least the next two quarters in order to stabilize its overall DRAM margin. SK Hynix kept up its performance in the second quarter with its mobile DRAM revenue at US$920 million, giving the supplier 24% of the market share. SK Hynix has also benefitted from the increase in its mobile DRAM production ratio and is already shipping a small volume of LPDDR4. Though SK Hynix is trailing Samsung in process migration by about six months and has slightly higher production costs, it will be able post strong results in the second half of 2015 despite declining market prices. The second-quarter mobile DRAM revenue of the U.S.-based supplier Micron amounted to US$637 million, which was an around 20% drop compared with the first quarter result and gave the supplier 16.6% of the market share. Unlike the two major South Korean suppliers, Micron lacks a captive market and is behind on process technology (currently at 30 and 25nm). Also, Micron’s development of eMCP products for mainstream Chinese smartphones is still in progress, thus putting the DRAM maker in a relatively weak position. ----- Read more at Trendforce

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March 28 2024 10:16 am V22.4.20-2
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