© albert lozano Business | May 17, 2013

Market oligopoly more obvious as Korea dominates industry

Total 4Q12 revenue for the mobile DRAM industry grew 21.4% from the third quarter and reached US$2.74 billion, boosted by climbing shipments of low to mid-end smartphones as well as seasonality.
In the first quarter of 2013, however, revenue fell to US$2.6 billion, a quarterly decrease of 5.2%, due to the effects of the off-peak quarter.

According to TrendForce, Korean makers Samsung and SK Hynix remain in the lead with their combined revenue accounting for 77.5% of the market, an even greater percentage than their PC DRAM share. For the most part, the revenue ranking for the first quarter remains the same as the previous quarter. The mobile DRAM market will likely see more significant changes after the merger between Micron and Elpida is completed in the second half of the year.

Samsung Smartphones See Strong Sales, Korean Makers Continue to Show Highest Mobile Revenue

The revenue of Samsung’s mobile DRAM, which remains its most important product line, accounts for 55.8% of the global market. Affected by seasonality and losses suffered from price decline, the maker’s total revenue decreased by 3.2%, but market share increased by 1.1% compared to the fourth quarter. From the demand perspective, strong sales forecast of Samsung’s Galaxy S4 has increased demand for its memory products in the second quarter, to the point that memory shipments to other clients are being affected.

SK Hynix’s mobile DRAM revenue fell by 13.8% in the first quarter, arriving at US$560 million, while mobile market share fell by 2.1% to 21.7%. From the market perspective, as iPhone 5 shipments were weaker than expected, SK Hynix’s mobile revenue and market share both suffered. Moreover, as PC DRAM prices increased by more than 30% in the first quarter and brought up the proportion of PC DRAM revenue earned, SK Hynix ended up ranking second in the market.

Elpida Revenue Grows Steadily, Micron’s eMCP Line for Sale Soon

Due to depreciation of the Japanese yen and downward adjustment of iPhone 5 shipments, Elpida’s mobile DRAM revenue decreased by 7.7% in the first quarter, putting its mobile market share at 18.5%, a 0.5% decline. Total mobile memory revenue amounted to US$480 million, placing Elpida in third. Elpida’s performance was satisfactory in the first quarter. The supplier’s Hiroshima fab is at fully loaded capacity, and subsidiary Rexchip is producing mobile DRAM as well. The manufacturer is expected to continue to see steady profits in the second quarter.

Micron’s mobile DRAM revenue amounted to US$ 71 million in the first quarter, 98% growth compared to the previous quarter. The supplier’s market share remains at a low 2.7%, up from 1.3% in the fourth quarter. As for product planning, Micron has begun volume production of 30nm high-density LPDDR2; after the merger with Elpida is finalized, the group will be able to target China’s smartphone market with eMCP products, which will undoubtedly have a positive effect on the supplier’s revenue.

Taiwanese Manufacturers Increasing Mobile Memory Output, Targeting Small to Medium-Sized Clients

Winbond’s mobile DRAM revenue increased slightly in the first quarter, with global market share arriving at 1.1%. The supplier’s mobile DRAM revenue accounted for 14% of total revenue. Currently, Winbond mainly produces low-density pseudo RAM and low-density LPDDR1, but LPDDR2 is in the customer qualification phase; profitability should see improvement in the second half of the year.

As for Nanya, at a mere 1%, mobile DRAM products did not make a significant contribution to total revenue in the first quarter. Currently, the 42nm process is Nanya’s mainstream mobile DRAM technology, but migration to the 30nm process is expected in the second half of the year. As the client testing phase is lengthy, in the early stages Nanya plans to cooperate with different memory module houses on eMCP products, while also working on manufacturing branded discrete packaging products to meet changing market demand.
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