© ra2studio dreamstime.com Analysis | May 26, 2015
Profits stabilize for memory makers
Mobile memory sales accounted for 29.8% of total DRAM industry revenue in the first quarter and is expected to keep growing.
According to DRAMeXchange, a division of TrendForce, the worldwide mobile DRAM revenue reached US$3.576 billion in the first quarter, a decline of less than 1% QoQ. Mobile memory sales accounted for 29.8% of total DRAM industry revenue in the first quarter and is expected to keep growing. According to DRAMeXchange’s Assistant Vice President Avril Wu, the additional 23nm production from Samsung boosted the first quarter’s mobile DRAM shipments by 8.2% QoQ. Furthermore, the average selling prices for mobile DRAM have been relatively steady. These factors contribute to the ongoing growth of the global mobile DRAM revenues. Wu noted that mobile DRAM prices will remain stable with a slight decline in the first half of 2015. New opportunities will arise as LPDDR4 arrives on the market and replaces its predecessor. For example, Samsung is seeing stronger than anticipated shipments of Galaxy S6, which carries 3GB of LPDDR4. Additionally, it is widely expected that the next-generation iPhones will come with 2GB of mobile memory. As such, prices will fall but the decline will be very limited. Currently, mobile DRAM accounts for almost 40% of the total DRAM supply. Both the speed of technology migration and the speed of LPDDR4 transition will determine whether global DRAM suppliers will maintain profit growths in the peak season during the traditional peak season in the second half of 2015. As PC DRAM prices plummet, key to profitability lies in mobile DRAM Samsung’s first quarter mobile DRAM revenues increased by more than 12% QoQ to US$1.86 billion. Mobile DRAM revenues have increased to 36% of the supplier’s DRAM sales. This significant bump from the previous quarter was attributed to price stability and added capacity. Samsung used to manufacture more PC and server DRAM than mobile DRAM as the former two types had higher margins. In the first quarter of 2015, however, PC DRAM margins shrank rapidly, making mobile DRAM production more attractive. Samsung is currently mass producing 20nm and 23nm mobile DRAM, and the memory maker is leading the pack when it comes to LPDDR4 production and is the first to launch 6Gb and 8Gb products. In sum, Samsung’s earning power will continue to grow. SK Hynix’s mobile DRAM revenue decreased significantly in the first quarter. The supplier was hit especially hard by seasonality because it does not have a captive market as Samsung does. Currently, SK Hynix’s major product is 25nm LPDDR3 4Gb, with the process technology having a projected life cycle of around a year. Since SK Hynix is behind Samsung on LPDDR4 development, the former will not get as much benefit as the latter from the demand of the next-generation iPhones (which carry 2GB LPDDR4) in the short term. Micron’s mobile memory sales amounted to US$810 million in the first quarter, a 3.6% QoQ decrease. The minor decline in revenues was attributed to the end of peak shipping of iPhone 6 and Samsung’s growing threat as the competing supplier for Apple products. Micron presently has migrated to the 25nm process, but it is behind its competitors on the development of LPDDR4 and eMCP, which is concerning in terms of the supplier’s future growth in mobile memory production. Taiwan-based DRAM Maker Nanya migrates to 30nm process while Winbond’s mobile memory sales grows despite the negative outlook Nanya’s mobile memory revenues in the first quarter reached US$50 million, a 21.6% QoQ decrease. The supplier’s global market share is down to 1.4%. This decline is the result of a sharp reduction of stock up efforts from the clients and cuts made to the mobile DRAM capacity. Though Nanya’s market share is relatively small, it is aggressively developing its mobile DRAM. The memory maker’s 30 nm manufacturing is scheduled to begin in the second half of this year, and mass production of LPDDR3 may also begin around the same time. This will help close the gap between Nanya and the top-tier suppliers. Winbond’s mobile DRAM revenue grew by 7% QoQ, bringing its global market share to 1.0%. Mobile DRAM accounts for 13% of Winbond’s total revenue, and the increase is based on product mix adjustments and technology migration. Currently, the supplier is working on the development of its 46nm process. Winbond’s capacity was fully loaded in the first quarter at 44K wafers per month, and the construction of a new fab is expected to begin this year with the expectation that it will have a capacity of more than 10K wafers per month available next year. How much equipment Winbond decides to buy for the new fab will depend on the market nonetheless. ----- Source: Trendforce