DRAM Market Hurt by Weak Pricing in Q1 2011

 
 
By Chris Preimesberger  |  Posted 2011-06-01
 
 
 

Those roller-coaster memory markets-in this case, dynamic RAMs-are at it again.

DRAM industry revenue in the first quarter of 2011 fell short of expectations-primarily due to low pricing, according to a quarterly report issued May 31 by industry market analyst IHS iSuppli.

Global DRAM revenue during the first three months of the year amounted to $8.3 billion, down from the $9 billion that market experts had expected. The first-quarter total represented a 5.6 percent decline from $8.8 billion in the last quarter of 2010.

The softness came as the result of lower-than-expected prices, which averaged $1.61 per megabyte unit during the quarter, compared with the expected $1.89. The DRAM average selling price in the fourth quarter of 2010 was $1.97.

In the first quarter of 2010, DRAM revenue was even higher at $9.4 billion, and average selling prices then were at a lofty $2.78.

DRAM, commonly used in servers of all types for boot-up and other purposes, stores each bit of data in a separate capacitor within an integrated circuit. Since real capacitors leak charge, the information eventually fades unless the capacitor charge is refreshed periodically. Because of this refresh requirement, it is considered a dynamic memory as opposed to SRAM (static RAM).

Among the world market leaders, Samsung Electronics remained No. 1 at 39.3 percent of the market, with $3.3 billion in quarterly revenue, down from $3.6 billion in the fourth quarter last year.

The four companies that actually gained market share were No. 2 Hynix Semiconductor, also of South Korea, up from 21.8 percent to 23.0 percent; No. 3 Elpida Memory of Japan, up from 13.4 percent to 13.5 percent; No. 4 Micron Technology of the United States, up from 12.4 percent to 13.0 percent; and No. 8 Winbond Electronics of Taiwan, up from 1.2 percent to 1.3 percent.

"Buffeted by weak market conditions, companies across the DRAM space saw their revenues contract across the board in the first quarter of this year," Mike Howard, principal analyst for DRAM and memory at El Segundo, Calif.-based IHS iSuppli, wrote in the report.

"For the Top 8 DRAM companies-together responsible for 98.1 percent of the total industry-revenue in the first quarter this year fell for every single player, although the rankings held steady."

 


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