AI Hardware Market to Reach $15.6 Billion
by 
The average price of mainstream 4GB DRAM modules has increased by 16 percent in the second quarter of 2013 from $23.50 to $27.25, as DRAM suppliers reduce production of commodity DRAMs, according to DRAMeXchange, a division of research firm TrendForce. This is the highest price for 4GB modules this year, indicating the end of an oversupply situation in the previous quarters, while driving supplier revenues to record levels, according to the market researcher.
"DRAM manufacturers' second quarter revenue broke records," said TrendForce, "increasing by 24 percent quarter-over-quarter (QoQ) to $8.5 billion for the highest quarterly revenue growth in three years." TrendForce forecasts that global DRAM revenue will continue to increase in the third quarter as DRAM manufacturers continue to adjust supply.
Here's a snapshot of supplier rankings in the second quarter of 2013:
Market leaders Samsung and SK Hynix's combined market share reached 62.7 percent, which is a slight decrease compared to the previous quarter.
Samsung's DRAM revenue rose by only 7.7 percent QoQ, primarily due to a five to eight percent drop in QoQ contract price for mobile memory, which lowered Samsung's overall DRAM revenue. To meet Samsung's mobile DRAM requirements, the manufacturer increased mobile memory production in the first half of the year, leaving less than 20 percent of total production for commodity DRAM in the second quarter, said TrendForce. Currently, mobile DRAM accounts for more than 40 percent of Samsung's production, and is the DRAM supplier's most profitable product despite the price contraction in the second quarter.
SK Hynix tallied an increase of 40.7 percent QoQ in revenue growth thanks to the commodity DRAM price increase. Commodity memory accounted for 40 percent of SK Hynix's total production in the second quarter. Caveat for buyers: Because PC shipments remain weak for the second half of 2013 in combination with Samsung buying mobile memory from SK Hynix, SK Hynix is expected to lower commodity DRAM output to 30 percent of total production in the second half of the year, according to TrendForce.
Elpida and Micron held 15.2 percent and 12.9 percent of the DRAM market, respectively, taking third place with a combined market share of 28 percent after their merger on August 1. Elpida's revenue increased by 37 percent QoQ due to higher commodity DRAM prices and a slight increase in bit volume from subsidiary Rexchip. TrendForce expects mobile DRAM to account for more than 20 percent of the combined total revenue, which will likely have a significant impact on the market.
Most Taiwanese suppliers recorded double-digit sales increases. Nanya's second quarter revenue increased by nearly 58.8 percent QoQ due to higher prices for specialty and commodity DRAMs. Nanya still has commodity DRAM in production although the supplier has made the transition to a foundry, said TrendForce. It's expected that Nanya will continue to lower production and increase the proportion of 30nm mobile DRAM to improve profitability.
The majority of Powerchip's revenue is derived from foundry business after selling its P3 fab equipment to Kingston, which now supplies all production materials, resulting in a 43 percent QoQ decrease in revenue for Powerchip. Winbond's revenue increased by 14.7 percent QoQ due to the increase in specialty memory prices.
Upshot: TrendForce believes that the major price fluctuations in recent years aren't likely to recur in the industry as a result of DRAM suppliers that have a monopoly on specific memory products as they exert control over market prices.
Related posts
