Electronics Production | June 01, 2011

Samsung remains 'Top Dog'

In what is considered a quiet time of the year for the dynamic random access memory (DRAM) market, industry revenue in the first quarter fell short of expectations due to weak pricing, reports IHS iSuppli.
Global DRAM revenue during the first three months of the year amounted to USD 8.3 billion, lower than the USD 9.0 billion anticipated. The first-quarter total represented a 5.6% decline from USD 8.8 billion in the fourth quarter of 2010.

The weak result came as the result of softer-than-expected average selling prices (ASPs), which averaged USD 1.61 during the quarter, compared to the expected USD 1.89. The DRAM ASP in the fourth quarter of 2010 was USD 1.97.

One year ago in the first quarter of 2010, DRAM revenue was even higher at USD 9.4 billion, and ASPs then also occupied a loftier perch at USD 2.78.

“Buffeted by weak market conditions, companies across the DRAM space saw their revenues contract across the board in the first quarter of this year,” said Mike Howard, principal analyst for DRAM and memory at IHS. “For the Top 8 DRAM companies—together responsible for 98.1% of the total industry—revenue in the first quarter this year fell for every single player, although the rankings held steady.”

© IHS iSuppli

Samsung’s lead remains unassailable, despite loss of share

Maintaining its formidable lead at the top was Samsung Electronics. Although DRAM revenue for the South Korean electronics giant fell to USD 3.3 billion in the first quarter, down from USD 3.6 billion in the fourth quarter last year, Samsung still accounted for 39.3% of the DRAM market.

That market share is down from 41.3% at the end of last year, and the first-quarter decline in 2011 marks the end of four consecutive quarters of market share gain for the company. But even with two points shaved off, Samsung’s share still is nearly double that of its nearest competitor and leagues ahead of the rest.

If history is any indicator, Samsung is poised for a strong rebound following its first-quarter decline. After Samsung’s previous two sequential declines in revenue—in the first quarter of 2007 and the fourth quarter of 2009—the company experienced a period of robust growth. Samsung’s next move is likely to be another all-out grab for DRAM market share.

Samsung’s loss is competitors gain

Samsung’s slight loss of market share at the top redounded to the benefit of the four players that saw their share rise during the first quarter, even though each firm’s revenue declined like everyone else.

The four companies that gained market share were No. 2 Hynix Semiconductor, also of South Korea, up from 21.8% to 23.0%; No. 3 Elpida Memory of Japan, up from 13.4% to 13.5%; No. 4 Micron Technology of the United States, up from 12.4% to 13.0%; and No. 8 Winbond Electronics of Taiwan, up from 1.2% to 1.3%.

Elpida and Micron in 2011 are likely to swing back and forth battling for the No. 3 market share spot. Neither, however, appears ready to challenge Hynix for second place in the near future, IHS iSuppli research shows. For Hynix, which had the smallest decline in quarterly revenue among the Top 8, the company’s share in the first quarter was also its highest ever.

Holding down the fifth, sixth and seventh spots were the Taiwanese DRAM makers Nanya Technology, Powerchip and ProMOS, respectively. Nanya and Powerchip held on to their market share unchanged, while ProMOS saw a dip of 0.1%—the only other company besides Samsung to suffer a loss of market during the period.
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