Global Sources
EE Times-India
Stay in touch with EE Times India
 
EE Times-India > Manufacturing/Packaging
 
 
Manufacturing/Packaging  

iSuppli: Taiwan, China may surpass South Korea in DRAM

Posted: 31 May 2007     Print Version  Bookmark and Share

Keywords:DRAM manufacturers  global DRAM revenues  memory suppliers 

South Korean DRAM makers may see their unit production lead over their foreign counterparts falter within the next three years, warned Derek Lidow, president and CEO of iSuppli Corp.

Speaking at the Seoul Digital Forum, Lidow said South Korea's DRAM manufacturers remain the leading players in the global market for now. The major South Korean DRAM makers, Samsung Electronic Co. Ltd and Hynix Semiconductor Inc., controlled 45 per cent of global DRAM revenue in 2006, compared to 17 per cent for Taiwan and China companies.

Lidow predicted that South Korean companies in 2007 will account for 47 per cent of total DRAM unit production, compared to 31 per cent for Taiwan and China and 22 per cent for other regions. Global DRAM revenue will rise to Rs.193,172.94 crore ($45.7 billion) in 2010, up 35 per cent from Rs.143,294.59 crore ($33.9 billion) in 2006.

However, this gap will begin to close in 2008, as manufacturers from Taiwan and China increase their DRAM unit output by 4 percentage points to 35 per cent, and the South Koreans' share declines to 46 per cent.

''South Korean companies are adding DRAM manufacturing capacity, but this is contributing significantly to the collapse in pricing for the memory this year,'' Lidow said in a statement. ''These price declines will cause South Korean manufacturers to reduce DRAM output growth next year. Meanwhile, Taiwanese/Chinese suppliers will increase their output, and may surpass the South Korean manufacturers in DRAM manufacturing capacity by 2010.''

South Korean suppliers are not in danger of losing their brand leadership because much of the Taiwan and China production is private-label and destined to be sold under other brand names, such as Qimonda AG and Elpida Memory Inc.

''The challenge is faced by Korea as a strategic manufacturing location, because there are many more Taiwanese and Chinese companies that can invest in such capital-intensive industries than there are Korean memory suppliers,'' Lidow said. ''Korea's manufacturing and investment base is highly concentrated and this makes it very challenging for the nation to maintain long-term leadership in capital-intensive areas, in spite of its superior technology and operational excellence.''

At present, the market is tough. ''The DRAM market has grown because of added manufacturing capacity, but this has required DRAM suppliers to drastically cut prices in order to sell their output,'' Lidow said. ''Prices now are below cash production costs for many suppliers. Annual DRAM revenue growth peaked in March, and is in the midst of a deceleration that will continue until March 2008.''

DRAM makers are already feeling the pain, with the industry as a whole expected to suffering double-digit negative DRAM operating profit margins in the second quarter. Profitability is likely to hit bottom at the end of June or in early July.

-Mark Lapedus
EE Times




Comment on "iSuppli: Taiwan, China may surpass S..."
Comments:  
*  You can enter [0] more charecters.
*Verify code:
 
 
Webinars

Seminars

Visit Asia Webinars to learn about the latest in technology and get practical design tips.

 

Go to top             Connect on Facebook      Follow us on Twitter      Follow us on Orkut

 
Back to Top