The expanding markets for Internet of Things, automotive electronics, and smart home devices have driven the demand for ...
Competition between QLED TV and AMOLED TV has continued in CES this year, and resolutions of the latest TVs include both 4K and 8K specifications...
Avril Wu, research director of DRAMeXchange, noted that latest fourth-quarter DRAM market outlook indicates that the overall sequential price increase will average around 10%. “Most PC-OEMs have concluded negotiating their contract prices with DRAM suppliers for this fourth quarter,” said Wu, “Contracts with first-tier DRAM suppliers show that the prices of PC DRAM modules have now risen above US$30 and maintained around US$30.5 on average, amounting to a 7% hike from the third quarter. This price increase is mainly attributed to the influence of the booming mobile DRAM market, which is in turn fueled by the limited product supply and the releases of flagship smartphones during the traditional busy season of this year’s second half.”
Wu also noted: “A closer look at the mobile DRAM market has revealed the Samsung has noticeably raised the quotes of its products. To ensure sufficient inventory, smartphone makers generally have no choice but to accept the price increases. Depending on the capacity specifications, prices of mobile DRAM products could go up by 10% to 20% in the fourth quarter compared with the third. As for the server DRAM market, strong demand during the fourth quarter also will push up contract prices of memory modules by 6% to 10% from the previous three-month period.”
The DRAM revenue ranking for the third quarter again shows that Samsung, SK Hynix and Micron were respectively first, second and third. Samsung grew its revenue by 15.2% from the second quarter to a new historic high of US$8.8 billion. SK Hynix’s revenue advanced considerably by 22.5% from the second quarter to US$.5.5 billion. In terms of revenue market shares, Samsung and SK Hynix accounted for 45.8% and 28.7%, respectively, in the third quarter. Together, they captured 74.5% of the global DRAM market. Micron took US$4 billion during the third quarter, registering a sequential increase of 13.0% and maintained a market share of 21.0%.
Wu added: “SK Hynix’s ASP was higher than Micron’s during the third quarter, and therefore SK Hynix was able to widen its market share lead over Micron. However, the situation will reverse in the fourth quarter with Micron having the highest ASP and posting the largest overall price increase versus the top two Korean suppliers. We can also expect Micron to shrink its market share gap with second-place SK Hynix in the year’s final quarter.”
All three major suppliers saw further increases in their operating margins for the third quarter. Samsung crossed the 60% threshold to reach a new historic high of 62%. SK Hynix’s operating margin came to 56%, up from prior quarter’s 54%. Micron registered the most significant growth from 44% in the second quarter to 50% in the third. Micron’s gain was on account of the gradual stabilization of its 17nm production. Going into the fourth quarter, suppliers are again expected to raise their operating margins due to rising prices.
With regard to technology and capacity planning, Samsung’s goal for 2017 has been the transition to the 18nm production. However, surging profits of the competitors over the recent quarters is starting to lean on Samsung, creating the possibility that the market leader may need to expand capacity to maintain its dominance. By increasing its output, Samsung will moderate the undersupply situation and constrain the price increases of its competitors. In sum, expanding capacity and maintaining a one- to two-year technological lead over its rivals will reinforce Samsung’s leadership in the long run.
SK Hynix has been focusing on improving the yield rate and expanding the deployment of its 21nm process. Its products based on the 18nm process on the other hand will roll out in small volumes at the end of this year. In terms of capacity planning, SK Hynix is currently building a second 12-inch wafer fab in Wuxi, China. The facility is expected to be in operation in 2019 at the earliest.
As for Micron, its subsidiary – Micron Memory Taiwan (formerly Rexchip) – has been improving its 17nm process, which is expected to have a yield rate of least 80% by the end of this year. Micron’s other subsidiary – Micron Technology Taiwan (formerly Inotera) – is still producing mainly on the 20nm process. However, Micron Technology Taiwan is planning to migrate half of its production capacity to the 17nm process in 2018.
According to DRAMeXchange’s third-quarter analysis on the revenue results of Taiwan’s domestic DRAM suppliers, Nanya posted a marginal growth of 5.3% from the second quarter. Specialty DRAM products make up the majority of Nanya’s product mix, and the price increases for these products have not been as large as the increases for products from the major suppliers (that also have more complete product lines). In the future, Nanya’s room for profit growth will expand as its cost structure improves due to the increasing yield of its 20nm technology.
As for other Taiwanese DRAM suppliers, Powerchip actually saw its revenue fell by 3.6% from the previous quarter. Powerchip during the third quarter was willing to give up a part of its DRAM revenue as the company has decided that more profit can be made by doing foundry works for other memory companies such as ESMT and AP Memory.
As a result, a part of Powerchip’s capacity that was originally for DRAM was then reassigned to make other products. Winbond’s third-quarter revenue rose 8.7% from the second quarter. Winbond has yet to offer a clear technology development plan. Therefore, the ASP trend will probably be the main factor influencing the company’s DRAM revenue in the future.
CTIMES loves to interact with the global technology related companies and individuals, you can deliver your products information or share industrial intelligence. Please email us to firstname.lastname@example.org
- 1The Top 10 Key ICT Trends to Observe in 2018
- 2Allion Labs Establishes IoT Innovation Center in Nantou, Taiwan
- 3China’s JHICC, Innotron Memory and Tsinghua Unigroup Emerge As Major Domestic Suppliers
- 4Macronix to Increase Its Advanced Process Manufacturing Capacity Next Year
- 5Broadcom Announces Industry’s First Silicon-Proven 7nm IP for ASICs in Deep Learning and Networking