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Hynix posts strongest Q3 growth in DRAM market

Posted: 14 Nov 2007 ?? ?Print Version ?Bookmark and Share

Keywords:DRAM market? DRAM production? NAND flash?

Global DRAM sales posted a mild growth in Q3, owing to the restrained price drop and the slow down in capacity growth in the segment. Amid this condition, Hynix Semiconductor Inc. made waves as it posted the strongest sales in the sector, reported DRAMeXchange.

Projecting DRAM bit growth for this year, DRAMeXchange forecast the rate to be 90 percent with ASP subjects to further drop in 2H 07 due to oversupply. There will be no significant turnaround in the ASP trend as market oversupply persists through Q2 08. Explains the market firm, DRAM makers generally choose to speed up their process migration to counter weak pricing, instead of trimming their capacity.

Seasoned DRAM makers saw their sales grew by.6 percent q-o-q in Q3 on a stabilizing price trend. DRAMeXchange reported DRAM ASP grew mildly in contract market and dropped by only 9 percent in the spot market in Q3. ASP trend among chipmakers varied in the quarter according to product mix.

The blackout at Samsung's NAND flash fab in early August that prompted Korean suppliers to grew their capacity, resulted in a q-o-q bit growth of 9 percent, down from 24 percent q-o-q growth in the previous quarter. ASP also benefited with a stable price trend, vs. the 40 percent ASP decline in Q2.

The market share of Korea-based chipmakers grew to 49.6 percent in Q3, followed by Taiwan makers' 13.1 percent. Taiwan makers had their market share decline by 0.5ppts q-o-q due to the growth of eTT sales proportion, where DDR2 eTT price dropped by 7 percent q-o-q (see table).

Based on the breakdown of sales by company, Hynix topped the pack with sales jumping 15.4 percent q-o-q in Q3, thanks to the 17 percent q-o-q shipments, as well as the 3 percent q-o-q ASP growth in the contract market. As of Q3, 15 percent of the company's DRAM production is fabricated on 70nm.

The breakdown of sales by major production camps in Q3 mirrors the earlier market trend, aside from the head-to-head competition between Hynix and Samsung, with the former extending its influence in the DRAM market (see see figure).

Based on present ASP trends, DRAM makers are producing with widening losses; general market consensus is only a rapid trim in capacity, which could then resume price to normality. But from the perspective of DRAM makers, capacity trim somehow means whittling down their power in the race at the meantime. Thus, they try to swing the poor pricing environment by suppressing cost further down with new process capacity ramp and yield improvement.

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