Samsung pads DRAM market lead in Q4

EL SEGUNDO, USA: Armed with a winning strategy, Samsung Electronics Co. Ltd. in the fourth quarter of 2010 managed to grow its already commanding share of the dynamic random access memory (DRAM) market, according to new IHS iSuppli research.

With preliminary results in, DRAM revenue for the South Korean electronics giant in the fourth quarter of 2010 amounted to $3.6 billion, equivalent to 41.7 percent share of an $8.7 billion market. And though revenue in Samsung’s case dropped during that quarter—as it did for all DRAM companies, without exception—Samsung’s share actually rose 1 percentage point compared to the third quarter, when total market revenue hit $10.7 billion.

Samsung retained its perch at the top of the DRAM heap as last year came to a close, with seven other companies fighting for the remaining three-fifths of the market.

Samsung’s positive performance was in direct contrast to a declining DRAM market, in which average selling prices (ASP) tumbled more than 28 percent in the final quarter of 2010, IHS iSuppli research shows.

“Samsung succeeded in picking up more business thanks to an astute playbook marked by a diverse product portfolio that hedged against excessive ASP declines, as well as an aggressive budget for capital expenditure that made sure the company’s shipments kept pace with the competition,” said Mike Howard, principal analyst for DRAM and memory at IHS.

Another winner during the quarter was No. 4 Micron Technology Inc., whose revenue dipped only 3 percent for the period. The Idaho-based firm finally began to see significant shipments being counted from its purchase of a stake in Taiwan’s Inotera Memories a few years ago. Micron’s market share edged up to 12.5 percent in the fourth quarter, up from 10.5 percent in the third quarter.

Other noteworthy players included No. 2 Hynix Semiconductor of South Korea, which has held approximately 22.0 percent market share for eight consecutive quarters; and third-ranked Elpida Memory Inc. of Japan, which suffered the biggest drop in revenue in the fourth quarter, down 35 percent to $1.1 billion and 13.0 percent share.
Shifts in DRAM market share will occur in 2011, IHS believes.

Samsung and Micron appear poised to extend their market share progress, but it is not clear if Taiwan-based Nanya and Elpida will be able to attain meaningful market share gains, given the commodity nature of the products in question.

Nanya, like Micron, takes shipments from its stake in Inotera, and Elpida brands DRAM made by rival Powerchip as its own.

One thing is clear: As the dynamic DRAM industry continues its wild and volatile ride, market share among companies when this year ends will be significantly different from that of last year.

Source: IHS iSuppli, USA.