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© wrangler dreamstime.com Analysis | November 15, 2018

Global DRAM revenue to reach a new record in 3Q18

The total revenue of the global DRAM industry grew by 9% QoQ, and again hit a new record high in 3Q18, reports DRAMeXchange, a division of TrendForce. But manufacturers’ profitability may approach its peak.
The survey of the price trends in the third quarter shows that contract prices in the mainstream application segments (i.e. PC, server, and mobile) maintained QoQ increases of 0-2%. Particularly, the contract price of mainstream DDR3 consumer DRAM was the first to drop during the quarter because of the weakening demand. Also, contract prices of graphics DRAM products fell by around 3% QoQ due to the sharp drop in the demand related to cryptocurrency mining as well as the higher base of the previous quarter.

The revenue growth of the quarter was attributed to the increased bit shipments rather than rising prices, which had been the main cause of the strong climb in the industry’s revenue during the past period of more than two years. In fact, prices practically flattened out in 3Q18 as the market supply has been steadily expanding in the second half of the year, according to DRAMeXchange.

As for the last quarter of 2018, contract prices started to slide in October and will keep falling through 4Q18, thus ending the upswing that had lasted for more than two years. Moreover, the future price declines will be rather steep because the market has entered oversupply and is experiencing high inventories as well. Against this backdrop, DRAMeXchange anticipates that the slump in contract prices will worsen in 1Q19, since excess inventories are still being carried by memory suppliers, downstream OEMs, and the channel market during that period.

Suppliers that are smaller in scale are generally the first ones to feel the impact of the price decline and take bigger hits in their revenues. Regarding the results of the top three DRAM suppliers for 3Q18, Samsung as the market leader again posted a new record high. Samsung’s 3Q18 revenue rose by 13.6% QoQ to USD 12.73 billion, showing the most impressive results among the top three.

With its ASP having risen by just 1% QoQ, SK Hynix grew its revenue by 6.0% QoQ to USD 8.15 billion in 3Q18. Together, the two leading Korean suppliers accounted for 74.6% of the global DRAM market in revenue terms. Samsung’s market share was 45.5%, while SK Hynix’s was 29.1%.

Micron, which remained third place in the revenue ranking, also increased its bit shipments. The growth of its ASP was relatively flat, however. Micron’s 3Q18 revenue advanced by 6.8% QoQ to USD 5.92 billion. Its global market share was 21.1%, showing no noticeable change from the previous quarter.
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December 13 2018 1:08 pm V11.10.14-1