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“The DRAM market benefitted from the upswing in ASPs and continuing progress in suppliers’ technology migrations,” said Avril Wu, research manager of DRAMeXchange. “At the same time, suppliers do not appear to have plans to expand their production capacities in a significant scale between now and the end of the year.” The global DRAM revenue has thus kept growing, registering a 16.9% sequential increase for this second quarter.
In the third quarter, the releases of new flagship devices from first-tier smartphone brands, together with the traditional peak sales season, will trigger another wave of mobile DRAM demand. DRAM prices in general will stay on an upward trend for the remainder of 2017.
The second-quarter revenue ranking shows Samsung firmly in its first place position. Samsung’s revenue for the second quarter came to another historical high, growing by 20.7% sequentially to US$7.6 billion. Second-place SK Hynix also posted an impressive sequential increase of 11.2%, totaling US$4.5 billion. Samsung’s and SK Hynix’s global market shares for the second quarter were 46.2% and 27.3%, respectively. Together, the two South Korean suppliers accounted for 73.5% of the world’s DRAM market. Third-place Micron’s second-quarter revenue totaled US$3.6 billion, an increase of 20.2% versus the first quarter and representing 21.6% of the global market.
In terms of operating margins, Samsung had the highest in the industry for the second quarter at 59%. Samsung benefitted from rising DRAM prices and its lead in manufacturing technology. Likewise, SK Hynix raised its operating margin from 47% in the first quarter to 54% in the second. Micron too increased its operating margin from 32.5% to 44.3% between the quarters. Since DRAM prices will keep rising and the production capacity expansion will be limited in the second half of 2017, suppliers can expect further increases in their operating margins.
In the aspect of technology migration, Samsung remains focused on developing its 18nm process. With the increase and stabilization of the yield rate, Samsung expects the 18nm to represent nearly half of its total DRAM output by the end of 2017. As for SK Hynix, the supplier is raising the yield rate and output share of its 21nm process. However, SK Hynix has also arranged for the mass production its 18nm process at the end of 2017. By the first half of 2018, SK Hynix wants to significant expand the DRAM production based on its 18nm technology.
Micron’s Taiwanese subsidiaries Micron Memory Taiwan and Micron Technology Taiwan (formerly known as Inotera) are respectively on the 17nm and the 20nm technology. Micron Memory Taiwan has steadily increased the yield rate for its 17nm process and expects at least 80% of its total DRAM output by the end of this year will be based on this technology. Micron Technology Taiwan, on the other hand, has no plan to transition to a more cutting edge technology this year. However, this subsidiary has set the target of attaining at least 50% output share for the 17nm process in 2018.
Regarding the Taiwanese DRAM suppliers, Nanya’s second-quarter revenue grew by 5.9% sequentially on the back of rising prices for specialty DRAM products. Nanya has formally begun mass producing DRAM on its 20nm process and is on track to achieve a total DRAM capacity of 30,000 wafer starts per month by the end of 2017.
Powerchip’s DRAM revenue for the second quarter fell by 2.5% compared with the prior quarter because of wafer loss caused by the moving of its 25nm processing equipment.
Winbond’s second-quarter DRAM revenue rose by 3.7% sequentially as the supplier also profited from rising prices for specialty DRAM products. Winbond has no immediate plan to increase DRAM wafer starts as it is focused on meeting the strong NOR Flash demand. However, the supplier has scheduled the mass production of DRAM on its 38nm technology for the second half of 2017. The increase in output due to the ramp-up of the 38nm process will make a positive contribution to Winbond’s future DRAM revenue results.
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