Semiconductor M&A Accelerates in 2019
by 
The average contract price for DDR3 4GB fell three percent from $19 in August to $18.5 in September, according to the latest price report from DRAMeXchange, a division of TrendForce.
The first-tier DRAM suppliers tried to hold the price around $20 to $21 in August, when the inventory level in the spot market was low, according to Avril Wu, assistant vice president at DRAMeXchange. Wu also noted the demand surge caused by China’s 70th anniversary of Victory Day, “in anticipation of the tightening of custom procedures for imports during the observation period,” resulted in an eight percent price increase in the spot market at one point.
“All these factors sustained the impression that DRAM chip prices had bottom out when it was not the case, and the market returned to its downtrend in September,” Wu added.
In addition, lower demand for several product segments, notebook computers, smart phones, and servers, have led to margin erosion for DRAM suppliers. “Projected shipments of smartphones and servers have been marked down, and this has seriously eroded the margins of DRAM suppliers,” said Wu.
DRAMeXchange expects the price decline of DRAM to become more severe in the first of half of 2016 than the current pricing.
“If the global economy continues to stagnate, the end market will not generate the demand needed to effectively consume the new DRAM chips produced on the advanced processes,” Wu said.
Currently, the DRAM industry is being led by three dominant players – Samsung, SK Hynix, and Micron, that are preparing their 18-nm processes for next year’s production, said DRAMeXchange. “Using the 18nm technology will increase the [manufacturing] output by at least 20 percent over the 20-nm technology since smaller chips allow for higher density and more power-efficient design in memory products.”
Wu’s take on the competition:
“Looking to maintain its technological lead, Samsung plans to start mass production on its 18nm process next year, thereby putting pressure on its trailing competitors.
SK Hynix, on the other hand, has announced that its production will gradually transition on to its 21-nm process by the end of this year. While SK Hynix still working on its 18nm technology, the supplier might achieve a breakthrough and have the technology ready for mass production in 2016.
Since U.S.-based Micron took over Japanese memory maker Elpida, the supplier has taken a lot time integrating its acquisition into its organization. This has caused the supplier to fall behind its South Korean rivals technologically by six months or more.
Micron’s fab in Hiroshima, Japan, is mainly producing on the 25nm technology, while its supply partner Inotera’s produces mainly on the 30nm. Micron is also developing its 18nm production at its Hiroshima fab, but the supplier has not set a date for mass production.”
Related posts
