Hynix Closes DRAM market share gap with Samsung in Q1
Hynix Semiconductor achieved the strongest performance of all DRAM suppliers in the first quarter, allowing it to come within striking distance of Samsung Electronics Co., according to iSuppli Corp.
South Korea-based Hynix had DRAM revenue of $2.2 billion in the first quarter of 2007, up 4.1 percent from $2.1 billion in the fourth quarter of 2006. While such a rise may not seem impressive, this increase came during a first quarter when global DRAM revenue declined by 9.9 percent, and every other global supplier suffered a sequential decrease in sales.
Due to its small rise in sales amid the general market decline, Hynix managed to increase its share of global DRAM revenue to 22.2 percent, a 3 percentage point rise compared to 19.2 Percent in the fourth quarter of 2006.
Meanwhile, Samsung, also of South Korea, underperformed the DRAM market in the first quarter with revenue of $2.5 billion, down 15.9 percent from $3 billion in the fourth quarter of 2006. This caused Samsung's DRAM share to decline to 26.1 percent in first quarter, down 1.9 points from 28 percent in the fourth.
"Hynix rocked in the first quarter," said Nam Hyung Kim, director and principal analyst for iSuppli. "The company's strong performance was due to its higher-than-expected production using 80nm process technology and its capacity reallocation from NAND to DRAM. Meanwhile, Samsung suffered a revenue decline because of its limited capacity growth during the quarter."
The Table presents iSuppli's revenue ranking for DRAM suppliers in the first quarter. Hynix also made gains in DRAM shipments, surpassing Samsung and taking the number-one position in the unit ranking in the first quarter for the first time. The company increased its unit shipments by 45 percent in the first quarter, a remarkable performance.
This gave Hynix a 22.7 percent share of DRAM units in the fourth quarter and put it 9 million units ahead of perennial leader Samsung.
Elpida on the rise
The other star in the first quarter was Japan's Elpida Memory, whose DRAM revenue market share reached 12.4 percent in the first quarter, up from 11.2 percent in the fourth quarter. Elpida's revenue amounted to $1.197 billion in the first quarter, down a mere 0.1 percent from $1.198 billion in the fourth.
Elpida displaced Micron in the fourth quarter last year in terms of unit shipments and now has only a marginal gap from the number-three supplier, Qimonda.
Elpida grew its bit shipments by a stunning 40 percent, compared to single-digit growth by Samsung and Qimonda.
Hynix, Elpida, Promos and Powerchip in the first quarter achieved more than 100 percent bit production growth compared to the first quarter of 2006.
This means that the partnerships of Hynix/Promos and Elpida/Powerchip are outgrowing their competitors and increasing their market shares.
Was Q1 really that bad?
Global DRAM revenue declined to $9.7 billion in the first quarter, down from $10.7 billion in the fourth quarter of 2006. The major factor behind the decline was a 26 percent decline in DRAM Average Selling Prices (ASPs) during the quarter.
However, global DRAM revenue increased by 49 percent compared to the first quarter of 2006. Quarterly DRAM bit shipments in the market grew by 21 percent sequentially, which represents the highest growth rate since the third quarter 2002.
This remarkable unit growth rate explains why DRAM prices have fallen significantly during the quarter. In fact, the global DRAM sales of $9.7 billion turned out to be slightly higher than iSuppli's forecast of $9.4 billion. Higher-than-expected bit growth offset the impact of the lower-than-expected ASP in the first quarter.
