Q109 revenue of global DRAM industry drops 22.3pc

TAIPEI, TAIWAN: According to DRAMeXchange, as the DDR2 1Gb contract quarterly average price dropped around 25 percent in Q109, the Q109 DRAM revenue decreased 22.3 percent QoQ.

Despite the declining contract price, Samsung and Hynix output cut down by 7.7 percent and 8.6 percent, and revenue shrunk by 16.1 percent and 16.3 percent, respectively. Samsung and Hynix proved a market share growth (26.5 percent and 22.3 percent). Samsung still ranks No. 1, followed by Hynix, resulting from the outperformed operation in first quarter.

For the different accounting periods (Q1 for Micron is Dec. Jan. and Feb.), Micron demonstrated the greater market share drop to 15.2 percent from 16.9 percent in Q4 with 35 percent contract price decline in last period (Q4 for Micron is Sep., Oct. and Nov.).

In March, Elpida started to receive all output production from Rexchip with the OEM shipment termination from PSC and revised capacity cut from Japan facility, the total production has descended in Q1. The Q1 revenue is down 24.5 % QoQ compared with Q408.

Qimonda filed bankruptcy in corporate restructuring process in Q1. The termination of OEM outsourcing from Inotera and Winbond and shutting down the US facility has resulted in the huge market share drop. Market share in Q1 is merely 4.7 percent.

Taiwan vendors
As for Taiwanese vendors, PSC announced $115 million in Q109 with -32 percent QoQ. Instead of contract manufacturing for Elpida, the capacity was used for own brand products. Thus, the own brand market share suprisingly grew to 17.4 percent.

Winbond announced $92 million in Q1 with -20% QoQ. Despite the revenue decline, Winbond's own brand market share increased 9.6 percent because of the output translation to own brand products since Qimonda filed bankruptcy.

With the contract price decline, Nanya's revenue merely shrunk 3.7 percent QoQ due to the raising portion in spot market and effect of two-weeks-degree inventory clearance. Due to the Qimonda's bankruptcy and revenue declining 55 percent in Q1, and Nanya jumped to No. 5 place in terms of brand-owned revenues. (Figure 1).

Fig. 1 1Q09 WW top 10 DRAM revenue ranking, by own brand DRAM revenue
(Company revenue includes outsourced portion and excludes the sub-manufacturing revenue)Unit: Million US dollars
Source: DRAMeXchange, May. 2009

Korean vendors
Korean vendors accounts for 48.8 percent in terms of DRAM chip production market share and own brand revenue are consistent with production revenue now since Hynix stopped outsourcing from financial struggling ProMos in Q1. Taiwanese vendors used to have larger portion of OEM and this situation has changed dramatically in Q1.

Except for ProMos' case, PSC stopped OEM shipment to Elpida while Winbond and Inotera stopped the OEM shipment due to the Qimonda bankruptcy. The market share has dropped to 19.2 percent from 23.2 percent because of the capacity cut. Micron's share slightly decreased to 15.3 percent, while Elpida's increased to 12.1 percent (Figure-2 and Figure-3)

Fig. 2 1Q09 WW top 10 DRAM revenue ranking, by DRAM chip production revenue
(Company revenue includes sub-manufacturing revenue and excludes the outsourced portion)Unit: Million USD
Source: DRAMeXchange, May. 2009

Market share of DRAM chip production revenueSource: DRAMeXchange, May. 2009.

For the global own brand, the Korean vendors' share accounts for 50.1 percent (excluding others) and its leadership position remained unchallenged in Q1. Taiwanese vendors' share slightly increased to 13.6 percent from 11.8 percent due to the production adjustment by PSC, Nanya and Winbond.

The remaining market shares are occupied by Japanese vendors (15.8 percent) and American vendors (15.7 percent).

Market share of own brand DRAM revenueSource: DRAMeXchange, May. 2009.

Note:
Figure 1:
** The revenue ranking by DRAM vendor own brand: The revenue in the table is using the results which were announced by the DRAM vendors and deduct the non-DRAM business revenue, then converted the number into USD basis with the average 1Q foreign exchange rate. This table is based on the vendor brand revenue basis.

** for Samsung Q1 DRAM revenue, DRAMeXChange approximatively derived the result by deducting LSI revenue from semiconductor based on the assumption that DRAM accounts for 48 percent in memory sectors and Q1 average exchange rate is USD KRW/1:1414. We apply this estimation to other vendors by indicating 76 percent for Hynix's total revenue, 79 percent for PSC, 90 percent for ProMos, 94 percent for Nanya and 80 percent for Winbond under the following exchange rate : USD to NTD/1:33.97, USD to JPY/1:93.63, USD to EUR/1:0.767.

Figure-2:
** Based on the fab manufacturing basis, the revenue is calculated and ranked by the total chip production revenue of the vendor’s fabs. Thus, the revenues of pure manufacturing vendors such as Rexchip and Inotera were independently listed. The Rexchip portion is excluded from the revenue of Elpida, the Inotera portion is excluded from the revenue of Nanya Technology. The reason we post the second table is because of the outsourcing percentage varied in Q109 and this effect will impact on Taiwanese vendor's revenue and market share ranking.