Tablets, smartphones boost mobile DRAM revenue in Q2

IHS has revealed that the revenue for mobile DRAM reached its highest level yet in Q2 in light of increased bit shipments and relatively steady pricing. Mobile DRAM revenue hit $1.85 billion in Q2, up from $1.83 billion in Q1, signifying the fourth straight quarter of growth for mobile DRAM revenue.

Only one year ago in 2Q11, mobile DRAM revenue had fallen to $1.55 billion—the result of more pronounced seasonal ebbs and flows in the market at that time that are now less apparent given the continued propulsive growth of smartphones and tablets, the two main consumers of mobile DRAM.

Q2 marked a new revenue record for the segment, exceeding the peak reached in Q1. The achievement is notable: while the overall DRAM market is down in 2012 compared to year-ago levels, mobile DRAM revenue is trending higher.

And in yet another sign of the mobile segment's growing importance to the overall DRAM space, mobile DRAM commanded more than 26 per cent of all DRAM revenue during Q2—a significant improvement from 19 per cent the same time a year ago, and from 11 per cent two years ago in 2010.

Two reasons account for mobile DRAM's rising market clout. Share of mobile DRAM bit shipments is now at 17.8 per cent, up from 7.9 per cent in Q1. Moreover, the price of mobile DRAM has fallen less than that of its besieged cousin, commodity DRAM. While commodity DRAM historically has been subject to great swings in pricing—with the product losing as much as half of its value from Q2 to Q4 last year alone—mobile DRAM pricing is less vulnerable, falling 10 per cent per quarter on average.

Mobile DRAM also tends to be priced according to manufacturing cost, not based on the general balance between supply and demand. As a result, DRAM companies are able to earn a more reasonable margin for their mobile memory products—unlike in commodity DRAM, where negative margins are frequently the rule.

Samsung Electronics continued its unshakable hold at the top of the mobile DRAM market in Q2, with sales of $1.1 billion, or 61 per cent of the global mobile DRAM market. With the success of smartphones such as the Galaxy S III, the South Korean electronics firm also is now one of the world's largest consumers of mobile DRAM, added IHS. Samsung enjoyed a three per cent improvement in sales during the quarter, and its YoY growth was even more impressive at 35 per cent.

Fellow South Korean entity SK Hynix Semiconductor was No. 2 behind Samsung with sales of $362 million, down from $366 million in Q1 and from $377 million the same time a year ago. Despite the loss, SK Hynix continued to hold down a fairly sizable share—equivalent to nearly 20 per cent of the total mobile DRAM space.

Elpida Memory of Japan and U.S.-based Micron Technology were in third and fourth places, respectively. Elpida snagged a 13 per cent share based on mobile DRAM revenue of $245 million, up sequentially by 12 per cent; while Micron saw锟絠ts share amount to four per cent in light of $79 million in revenue, down 30 per cent on the quarter.

For SK Hynix and Elpida in particular, the two have seen their share of activity increase at Apple during the past months because they supply mobile DRAM for the iPhone. Apple and Samsung, meanwhile, continue to challenge each other—in both the courtroom and the marketplace—with their mobile products.