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IC Insights: DRAM makers perform worst in 2007

Posted: 20 Feb 2008     Print Version  Bookmark and Share

Keywords:DRAM  memory makers  IC Insights  growth figures 

DRAM makers performed the worst in 2007 in terms of revenue growth, overturning the trend a year earlier, according to a study from market research group IC Insights Inc.

The researchers say the poor results emphasise the dramatic 39 per cent drop in the overall average selling price of DRAMs in 2007.

DRAM companies occupied the last four positions among the 50 largest semiconductor suppliers in 2007. This is nearly a complete reversal from 2006, when seven of the top 10 companies (ranked by growth rate) were DRAM suppliers.

The figures indicate that ProMOS Technologies Inc., which was ranked top in the list of 50 chip suppliers in 2006, fell to last-but-one spot last year, with a negative growth rate of 30 per cent. Qimonda fared almost as badly, with negative growth of 26 per cent, and dropping from sixth spot in 2006 to 48th position last year.

The rankings are based on growth of total semiconductor sales.

Powerchip tumbled from third slot in 2006 to 47th in 2007, with negative growth of 17 per cent, and Nanya fell from number five in 2006 to last in the top 50 of 2007, also chalking up negative growth of 30 per cent.

Few survivors
The DRAM market leader, Samsung Electronics Co. Ltd, was one of the few that managed to remain in positive growth territory, of just 1 per cent, and climbed six places to 27th from the previous year.

Hynix Semiconductor Inc. and Elpida Memory Inc. also bucked the trend of severe downward growth with each enjoying double-digit revenue increases in both 2006 and 2007. Hynix's growth rate placed it at 10th in both years, while Elpida slipped from the second slot it occupied in 2006 to 17th in 2007.

IC Insights suggests the outlook for the DRAM market and for most DRAM vendors in 2008 does not improve much. The analysts suggest the current difficult pricing/profitability situation facing many is likely to extend to mid-2008, at which point, seasonal market conditions should bring some relief in the form of upward pricing.

However, the overall DRAM market is still forecast to decline 7 per cent this year.

Demand for DDR3 and 1Gbit-based modules, and the increasing DRAM content per PC suggests that demand will remain solid through 2008 and beyond, IC Insights estimates.

Meanwhile, many DRAM suppliers have planned significant reductions in capital expenditures for 2008. Assuming DRAM vendors do not break rank and stick to their capex plans—which IC Insights readily admits is a big assumption—capacity could grow tight throughout the next three to five years, driving DRAM prices upward.

- John Walko
EE Times Europe

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