Sunday, August 21, 2016

2Q 2016: Global Mobile DRAM market share: Samsung 47.4%, SK hynix Inc 26.5% and Micron 19 %











Press Release:

Bit Supply Growth Led to Small Sequential Increase of 6.3% in Global DRAM Revenue for Second Quarter, Says TrendForce.

Market oversupply continued to put downward pressure on DRAM prices in the second quarter, according to DRAMeXchange, a division of TrendForce. Compared with the prior quarter, the global average sales price (ASP) of DRAM for all applications fell by more than 5%. On the other hand, the global DRAM revenue for the second quarter rose 6.3% sequentially to US$9.1 billion due to the expansion of bit supply. Increased output from Micron’s 20nm and SK Hynix’s 21nm processes were the drivers of this bit supply growth.

“Looking at the end market, shipment results of notebooks and server-related products were average in the second quarter, but smartphone shipments remained strong in China,” said Avril Wu, research director of DRAMeXchange. “The top three DRAM makers therefore continued with their shift towards mobile products in their portfolios. DRAMeXchange expects global DRAM revenue to increase significantly in the third quarter on account of the peak season stock-up demand.”

All three major suppliers posted revenue growth as Micron made a turnaround
Samsung topped the second-quarter revenue ranking, registering a quarterly growth of about 8.7% and holding on to 47.4% of the global DRAM market. SK Hynix was second place in the ranking, posting a sequential revenue increase of 4% and controlling 26.5% of the market share. Micron followed in third place with a quarterly revenue growth of 8.8% and 19% market share.

Declining ASP has pushed down DRAM suppliers’ operating margins. Samsung’s operating margin fell from 40% in the first quarter to 36% in the second, while SK Hynix saw a drop from 24% to 18%. Though Micron still posted a negative operating margin of 0.6%, this result is up from the negative operating margin of 1.2% in the prior quarter. The improvement in Micron’s operating margin was attributed to the yield stabilization of its leading-edge manufacturing process.

SK Hynix and Micron starting to reap benefits from their respective technology migrations
Samsung has the lowest overall cost among the top three suppliers as its 20nm process has become the mainstream manufacturing technology for all of its products. While Samsung is preparing to migrate to the 18nm technology in the middle of this year, the supplier also wants to limit its output and control the market supply. Hence, Samsung will slightly scale back the wafer capacity of its 18nm process. 

The DRAM maker’s strategy puts emphasis on raising ASPs of products over cost reduction.

As for SK Hynix, the supplier has been producing on the 21nm process for about two quarters with PC DRAM making up most of its output. SK Hynix is expected to improve its profitability further in the second half of 2016 by stepping up its cost-cutting efforts.

In the second quarter, Micron steadily increased the share of 20nm products in its total output, thus raising its operating margin. Micron will keep pushing down costs by allocating more of its production to the 20nm process. “The U.S.-based supplier will also see revenue growth in the latter half of this year as DRAM prices rebound,” said Wu.

With regard to Taiwanese DRAM makers’ second-quarter performances, Nanya posted a sequential revenue decline of 12.3%. Slumping prices for PC and specialty DRAM products hit Nanya hard during the period. At the same time, the supplier’s main clients slowed down their shipment pickups. However, Nanya is close to finish building Fab 3A North and will be testing the 20nm technology there in the first half of 2017. With this new facility, Nanya will be able to cut down on costs.

Powerchip’s DRAM revenue for the second quarter fell 6.3% sequentially due to product mix adjustments. The semiconductor manufacturer has allocated more of its capacity to produce LCD driver ICs, which are currently in high demand.

Winbond saw its revenue increased slightly by 3.3% versus the prior quarter. Winbond has kept raising the percentage of 46nm products in its total output, and its revenue has also benefitted from sales of specialty and mobile DRAM. The supplier’s newest and most advanced production facility Fab C will be in operation soon and its maximum wafer capacity will be around 16,000 pieces per month. Winbond will be testing its most advanced technology – the 38nm process – at Fab C in the first half of 2017 at the earliest.



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