DRAM update: Q3 market revenue drops 2.4pc

TAIPEI, TAIWAN: According to DRAMeXchange survey statistics, commodity DRAM contract price dropped 34 percent and spot price plunged to 52 percent in Q308. The price difference between contract and spot prices expanded from 0.3 percent ($2.13 VS $2.12) in Q2 to 14.7 percent ($2.07 VS $1.76) in Q3. Although the quarterly average contract price dropped only 2.8 percent, the drop ranges of contract price of August and September were 11 percent and 15 percent, respectively.

Qimonda, the last DRAM vendor to announce its financial report in Q3, was released. The revenue was $613mn, and QoQ slightly increased 2.2 percent. The global Q3 DRAM revenue only slightly decreased 2.4 percent QoQ to $6.355 billion. Comparing to Q2, the revenue of vendors, which were more involved in the spot market decreased more due to the sharply declined spot price. Nanya was the one with the most increased revenue mainly because Inotera enjoyed output increase from its process migration and Nanya’s increased ramp up volume in its own 12” fab. The Nanya Q3 output increased 30 percent.(see Figure 1).

Figure 1. 2008 WW Own Brand DRAM Top 10 Revenue Ranking, in Million USD

(Revenue of outsourced portion was excluded from the OEM DRAM vendors and included in the Brand DRAM companies



* Revenue break down by brand, revenue of outsourced items was included by brand companies and excluded by OEM DRAM vendors.

Source: DRAMeXchange, Dec. 2008

Financial reports showed that Samsung was the only memory vendor, which enjoyed profit in this industry. The DRAM OP margin dropped form 5 percent in Q2 to 4 percent in Q3. Taiwanese vendors mostly didn’t perform well with the OP margin of -48 percent to -70 percent.

In Q308, the market share broke down by countries didn’t show significant change from Q2. South Korea accounted 45.5 percent, US 12.6 percent, Taiwan 15.2 percent, and Germany 9.8 percent. Breaking down by strategic alliance, after Micron acquired Inotera and licensed technology to Nanya, the future market share will increase sharply. As far as Qimonda is concerned, including Winbond, it still shows down trend of its market share. (Figure 2).

Figure 2: DRAM market share by regions of brands Q308

Note: Revenue of outsourced portion was excluded from the OEM DRAM vendors and included in the brand DRAM companies.

Source: DRAMeXchange, Dec. 2008

DRAMeXchange estimates that the yearly global DRAM industry revenue will reach $23.2 billion in 2008, decreased 24.7 percent from 2007. The yearly supply bit growth will reach 67 percent, and the ASP will plunge 55 percent, respectively.