Components | August 23, 2012
1HAug. DRAM contract price falls over 5%
According to DRAMeXchange, a research division of TrendForce, DRAM contract price continued on a downtrend in 1HAug.
As the industry enters the middle of August, the DRAM contract price decline is becoming steeper. As overall demand is sluggish and PC OEMs’ inventory levels remain high, DRAM makers are lowering prices to stimulate demand. However, the move did not help close deals any faster; orders were not placed until after August 16. Currently, average 4GB module price falls around US$18.75, a 5% decrease compared to 2HJul., while lowest price at US$18.50. DRAM contract price is expected to see an 8% monthly decline for the month of August; suppliers’ losses are increasing as price approaches the US$18 mark. The average 2GB module price trend is showing a decline as well, falling to US$10.50. From the price perspective, it is clear that 4GB is gradually replacing 2GB as the mainstream density. Thus, since price decline has always been the most severe for mainstream products, the 4GB price trend is showing a greater decline than the 2GB trend. When demand is weak, suppliers have no choice but to lower prices; however, the biggest issue for the DRAM industry is the fact that there is no demand to stimulate when it comes to PC DRAM. In the absence of capacity withdrawal or reallocation, the majority of DRAM makers have been experiencing losses for several quarters now. TrendForce indicates, based on the current supply-demand curve, unless a total capacity of 80-100K wafers per month is removed from the market, it will be difficult for DRAM price to return to healthy levels. DRAM Industry Oversupply Continues, Capacity Cuts Sole Hope for Survival To stay competitive, in addition to gathering funds and expending capex on technology migration, major DRAM manufacturers have been transitioning to 4Gb instead of 2Gb chip production. Production technology is advancing from the 30nm to the 20nm process, which makers hope will make the rate of cost reduction faster than that of price decline. However, looking at financial reports for 2Q12, the only manufacturers that saw profits for the quarter were Korean suppliers Samsung and SK Hynix. As the remaining DRAM makers continue to show negative margins, it is difficult for them to spend any large amount of capex; thus, their cost competitiveness is declining, in the formation of a vicious cycle. TrendForce indicates, the DRAM industry is facing rapid change in its demand ecosystem: PC and NB shipment growth is not performing as well as in previous years, and content per unit has not been increasing as DRAM price drops. The DRAM industry is seeing stagnating demand; although total DRAM bit output continues to grow, industry revenue is decreasing every year. Although in recent years DRAM makers have been reallocating excess PC DRAM capacity to non-commodity DRAM production in a bid for self-preservation, there is a large gap in terms of profitability for different products: the mobile and server DRAM markets are more or less monopolized by the Korean suppliers, as they hold over 70% of the market together. As the majority of Taiwanese manufacturers’ production is focused on commodity DRAM and they do not have proprietary technology, they are at a disadvantage when it comes to both spot market fluctuations and contract price negotiations. As Nanya is the sole remaining DRAM brand manufacturer in Taiwan, Taiwanese market share currently accounts for less than 10% of the global market. As high capital investment is required in the DRAM industry, cutting production to help ease oversupply is a difficult choice, as investments previously made in manufacturing equipment will see less return. Unfortunately, capacity cuts are currently the only solution to remedying industry oversupply. If losses continue to increase, exceeding cash cost, makes will face problems with operating cash flow. Currently one supplier has made a small capacity cut of 40K wafers per month, beginning in August. However, TrendForce indicates that with high PC OEM inventory levels, such a small reduction will not benefit the supply-demand balance much. As module contract price continues to fall rapidly, manufacturers with weaker finances will have to initiate a round of capacity cuts, or likely be faced with a DRAM price collapse.
Graphcore secures additional $150 million in new capital Bristol-based pure-play machine intelligence AI processor company, Graphcore, has secured an additional USD 150 million in new capital.
Nexperia partners with Ricardo to develop GaN-based EV inverter design Nexperia has entered into a partnership with automotive engineering consulting company, Ricardo, to produce a technology demonstrator for an EV inverter based on gallium nitride (GaN) technology.
TSMC to hire thousands of new employees in 2020 The contract semiconductor manufacturer is reportedly planning to hire more than 4’000 new employees over the course of the year as it plans to develop high-end processes.
Elmos increases semiconductor sales by 7.7% in 2019 According to preliminary, unaudited figures, Elmos Semiconductor increased sales of the semiconductor business by 7.7% to EUR 273.4 million in 2019.
STAr expands via acquisition of Accel-RF Taiwanese company, STAr Technologies, announces that it is acquiring San Diego-based Accel-RF Instruments Corporation.
RoodMicrotec signs sales representative agreement with Cedar RoodMicrotec N.V., has appointed Cedar Technologies as sales representative for the Nordic countries, Poland, the United Kingdom, and Ireland.
GlobalFoundries & GlobalWafers sign MoU to increase capacity GlobalFoundries (GF) and GlobalWafers Co., Ltd. (GWC), have signed a memorandum of understanding to develop a long-term supply agreement for 300mm silicon-on-insulator (SOI) wafers.
Nichicon inks new sales partnership with ICEL Nichicon (America) Corporation has entered into a new partnership with Italian film capacitor manufacturer, ICEL. Nichicon will represent ICEL through sales and marketing efforts in the Americas.
Significant decline in sales in the German component distribution German component distribution shrinks by 20% in the fourth quarter of 2019, says the FBDi e.V.
Samsung starts mass production at new EUV manufacturing line Samsung Electronics’ new semiconductor fabrication line in Hwaseong, Korea, has begun mass production.
Avery Dennison invests in new factory in Brazil Avery Dennison is gearing up for future growth of RFID technology. Just months after signing a deal to acquire Smartrac's transponder division, the company announces the location of its next RFID manufacturing facility, its first in Brazil and fifth in the world.
ST and TSMC team up on Gallium Nitride-based products STMicroelectronics and TSMC are collaborating to accelerate the development of Gallium Nitride (GaN) process technology and the supply of both discrete and integrated GaN devices to market.
WD to sell ActiveScale business to Quantum Western Digital Technologies, Inc. has entered into a definitive agreement to sell its ActiveScale business to Quantum Corp., under which Western Digital's full line of ActiveScale products will be sold.
Maxim accelerates in Europe with $25M investment in Ireland Maxim Integrated Products, Inc. is opening a new design centre in Dublin, Ireland. The design centre will focus on product development and conducting R&D in the areas of analog semiconductor design.
Workers to stay home as SK Hynix trainee had contact with virus patient 800 workers of the South Korean chipmaker has quarantined themselves – as a preventive measure – in order to keep the spread of the Coronavirus at bay.
Dialog Semiconductor to acquire Adesto Technologies Dialog Semiconductor has signed a definitive agreement to acquire all outstanding shares of Adesto Technologies Corporation.
Renesas and Panthronics team up on wireless charging and IoT solutions Renesas and Panthronics AG, a fabless semiconductor company specialising in high performance wireless products, are collaborating to bring solutions to the consumer, industrial, and Internet of Things (IoT) markets.
Murata completes new production facility in Malaysia Murata Electronics (Malaysia) Sdn.Bhd. (Perak, Malaysia), a production subsidiary of Murata Manufacturing Co., Ltd., recently completed construction of a production facility that was started in October 2018.
AKKA is now a majority owner of Data Respons Following the closing of the voluntary offer period, AKKA holds 72.89% of Data Respons’ share capital.
Sequans and Avnet sign global distribution deal Sequans Communications S.A. and Avnet have entered into a distribution agreement whereby Avnet will promote and sell Sequans’ IoT chips and modules and will exclusively promote and sell Monarch Go, an LTE-M/NB-IoT modem component designed for and certified by Verizon.
Synopsys completes acquisition of certain IP assets from INVECAS Synopsys, Inc. has completed its acquisition of certain IP assets from INVECAS. This acquisition broadens Synopsys' DesignWare Logic Library, Embedded Memory, General Purpose I/O, Analog, and Interface IP portfolio.
Qualcomm: Coronavirus may impact phone industry Chip maker Qualcomm Inc has issued a statement that the coronavirus outbreak in China poses a potential threat to the mobile phone industry.
South Korean supplier to set up manufacturing in Hungary Soulbrain, a South Korean materials company supplying chemicals used in semiconductors, displays and battery cells, is establishing its first European unit in Tatabánya in Hungary.Load more news