Technology

The DRAM Disaster and Its Aftermath

Some producers sink, some rise

By Alexandru Pancescu, Hardware Editor

30th of July 2007, 09:24 GMT

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For some time now, the entire DRAM market is in shambles with producers and retail channel vendors trying to come to an equilibrium and stabilize it while saving their own revenues from going too low. The worst of it seems to have passed together with the second quarter of the year 2007 when global DRAM generated revenues were very low, just like the average selling prices, according to the company iSupply who was cited by the Web based

news site DigiTimes.

"In the second quarter of 2007, global DRAM revenues declined by 24.1% on quarter to US$7.3 billion. Chipmakers, including Samsung Electronics and Micron Technology, both saw their sales slip on a quarterly basis with Samsung seeing its revenues drop by 16.7% on quarter and Micron dropping by 15.7%. DRAM ASP also dropped by 39% the during the period, though this rate is slightly less than the previously estimated 40% drop." The scale of the damage inflicted on the DRAM makers is most evident when we see that from the top ten manufacturers, only the company Etron Technology managed to increase its revenues. The most important factor that led to this market situation was the rise in inventories, as DRAM shipments to vendors increased by 23 percent, a figure that was much higher than anticipated.

Still on the top of the entire DRAM producing industry, Samsung Electronics increased its memory shipments by 34 percent and thus distanced itself even more from its direct competitors. Even forced to slice DRAM prices with 28.4 percent, the company claimed an additional 2.5 percentage of the total memory market for itself. Its main rival, Hynix Semiconductor managed to hold on to its 20.7 percent of the memory market, being the number two among the top DRAM manufacturers. As its shipments reached an all times low, the company Elpida Memory suffered more, experiencing a drop of 24.4 percent in its revenues, but as it entered a joint venture with Powerchip Semiconductor Corporation and Rexchip Electronics, Elpida Memory is expected to rapidly increase its production.

For Micron Technology things never looked too bleak as its revenues and shipments never even came close to the medium descending trend. Moreover, the company managed to increase its market share to 10.1 percent during the second quarter of the year 2007. For the second half of the year, analysts expect a slight increase in memory pricing as the main DRAM manufacturers announced their decision to lower shipments.

TAGS:

DRAM | memory | producer | manufacturer | market

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