DRAM price rises in traditionally weak Q1

However, not all DRAM suppliers have seen the same gains, as some produce more commodity DRAM than others. SK Hynix and Micron have benefited the most from the uptrend. As DRAM industry restructuring continues, prices are expected to continue supporting revenue growth in Q2.

Looking at TrendForce's global DRAM brand manufacturer revenue ranking, Korean makers Samsung and SK Hynix's combined market share represents 64.3 per cent of the market, three per cent less than in the previous quarter. Samsung's DRAM revenue saw a 10 per cent quarterly decrease. As its commodity DRAM production has been reduced to less than 20 per cent of total supply, the supplier did not benefit as much from the price rebound. However, since Samsung's mobile DRAM output exceeds 40 per cent and mobile DRAM is the most profitable of all memory products, Samsung's first quarter margins were strong despite the revenue decrease. As for SK Hynix, the supplier slowed ramping of mobile DRAM production partly due to the fact that Apple's shipments were weaker than expected. With SK Hynix's commodity DRAM output at 42 per cent of total production, the supplier was able to maintain 5.7 per cent revenue QoQ growth in Q1. Micron experienced the highest revenue growth for the quarter, 23.8 per cent, due in large part to the addition of Inotera's capacity to the Micron group. As for Elpida, revenue growth amounted to 11 per cent in Q1 based on calculations in yen, but due to currency depreciation, conversion to U.S. dollars results in a 2.3 per cent decrease in revenue.

As for Taiwan suppliers, although Nanya has officially shifted its business focus to speciality DRAM, the maker still had commodity DRAM in production during Q1. While the manufacturer has turned to foundry business, its capacity remains fully loaded, and commodity DRAM inventory contributed to a 9.3 per cent revenue increase. Powerchip has transitioned to foundry work as well. Since the manufacturer reduced commodity DRAM production in Q4, revenue decreased significantly. As a result of the low base period, Powerchip experienced 62 per cent growth after resuming commodity DRAM production in Q1. Winbond remains focused on speciality memory sales while it slowly increases the proportion of mobile DRAM production. In addition to manufacturing Pseudo DRAM, Winbond has also begun volume production of low-density LPDDR1 products, resulting in a slight 0.5 per cent QoQ climb in revenue. In summary, DRAM manufacturers' revenue is strongly affected by commodity DRAM prices. In 1Q13, commodity DRAM fared well, resulting in revenue growth for most memory makers.