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DRAM market still in oversupply, says iSuppli

14 May 2009 | By Mark Osborne | News > Fab Management

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The DRAM market disaster continued into the first quarter of 2009, according to Nam Hyung Kim of iSuppli Corp. Global DRAM revenue in the first quarter declined by 20.1% compared to the fourth quarter of 2008.  Revenue also fell by 44.1% from the first three months of 2008. The DRAM per-megabyte Average Selling Price (ASP) declined by 8% in the first quarter, while shipments of megabyte units dropped by 13% compared to the fourth quarter.

However, megabyte unit shipments grew 10% in the first quarter of 2009 compared to the same period in 2008, indicating that more production cuts are needed to accelerate market recovery during this worldwide recession.

With Qimonda exiting the market and halting DRAM production, shifts in the rankings were expected. Micron Technology increased its share of global DRAM revenue to 14.6%, up from 13.8% in the fourth quarter, and up from 11.3% from the first quarter of 2008. This led to Micron moving up to third in the quarter, just passing Elpida.

“Micron’s comeback poses a risk to the health of the DRAM industry and threatens the leading players in the market,” said Nam Hyung Kim, director and chief analyst, memory ICs, for iSuppli. “Until 2003, the company had been a solid No. 2 behind Samsung but had seen its share decline due to its effort to diversify its product line beyond DRAM and its lateness to invest in 300mm fabs. Micron now has renewed its competitive vigor, mainly due to its acquisition of a 300mm fab from Inotera in Taiwan. Micron’s resurgence could trigger a DRAM market share war—which would drive prices down and adversely impact industry profitability in the future.”

Samsung also fared well, growing share in the quarter and solidifying its top position in the DRAM market. Samsung now has a 34.3% share of the market.

Nanya’s 2.7% growth was a result of the comparison with its underperformance in the fourth quarter. Furthermore Qimonda’s move to stop all DRAM production helped Nanya to enter the Top-5 rank.

Kim said that further cuts in production were needed before a recovery in ASPs and a return to profitability were possible.

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