Lower ASPs and soft quarterly performance are to blame; all companies see quarterly revenues contractCompanies in the dynamic random access memory (DRAM) space saw revenues contract across the board in the ﬁrst quarter of this year, their levels uniformly depressed by lower average selling prices (ASP) and a sluggish performance in which industry revenue slumped 6 percent, according to IHS iSuppli research.
In what is considered a quiet time of the year for DRAM, industry revenue in the first quarter came in at $8.3 billion, lower than the $9.0 billion anticipated. The relative weakness arrived on the back of softer-than-expected ASPs, which averaged $1.61 during the quarter.
In comparison, DRAM revenue in the fourth quarter of 2010 amounted to $8.8 billion; ASPs at that time were $1.97. One year ago in the first quarter of 2010, DRAM revenue was even higher at $9.4 billion, and ASPs then also were enjoying a loftier perch at $2.78.
For the Top 8 DRAM companies—together responsible for 98.1 percent of the total industry—revenue in the first quarter this year fell for every single player. Rankings, however, remained unchanged throughout the period.
How the Rankings Played Out: None Threaten Samsung’s Hold at the Top
Maintaining its formidable lead at the top was Samsung Electronics. Although DRAM revenue for the South Korean giant fell to $3.3 billion in the first quarter, down from $3.6 billion in the fourth quarter last year, Samsung still accounted for 39.3 percent of the DRAM market.
That market share is down from 41.3 percent at the end of last year, and the first-quarter decline in 2011 marks the end of four consecutive quarters of market share gain for the company. But even with two points shaved off, Samsung’s share still is nearly double that of its nearest competitor and leagues ahead of the rest.
More important, after its last two setbacks—in the first quarter of 2007 and the fourth quarter of 2009— Samsung’s market share experienced a period of robust growth. If history is any guide, the first quarter this year will be the calm before the storm, IHS predicts, presaging the next assertive phase for Samsung as it makes an all-out land grab once more for DRAM share.
Samsung’s slight loss of market share at the top likely redounded to the benefit of the four players that saw their share go up during the period, even though each firm’s revenue declined like everyone else.
The four companies that gained market share are No. 2 Hynix Semiconductor, also of South Korea, up from 21.8 percent to 23.0 percent; No. 3 Elpida Memory of Japan, up from 13.4 percent to 13.5 percent; No. 4 Micron Technology of the United States, up from 12.4 percent to 13.0 percent; and No. 8 Winbond Electronics of Taiwan, up from 1.2 percent to 1.3 percent.
Elpida and Micron in 2011 are likely to swing back and forth battling for the No. 3 market share spot. Neither, however, appears ready to challenge Hynix for second place in the near future, IHS iSuppli research shows. For Hynix, which had the smallest decline in quarterly revenue among the Top 8, the company’s share in the first quarter was also its biggest ever.
Holding down the fifth, sixth and seventh spots were the Taiwanese DRAM makers Nanya Technology, Powerchip and ProMOS, respectively. Nanya and Powerchip held on to their market share unchanged, while ProMOS saw a dip of 0.1 percent—the only other company besides Samsung to suffer a loss of market during the period.