RSSDRAM Suppliers Take Major Hit in Second Quarter
By Scott M. Fulton, III | Published July 27, 2007, 3:11 PM
The second quarter of 2007 was a terrible time to be in the DRAM business. Tremendous oversupply led to plummeting revenues for all of the world's top 8 and #10 suppliers, even though shipments continued to rise, according to a report released today by technology analyst firm iSuppli.
Hit hardest by the typhoon was #2 Hynix Semiconductor, which saw revenues whacked down 29.7% over the previous quarter to about $1.52 billion, despite unit shipment growth over the previous quarter of 22%.
Elpida -- which has been surging onto the scene this year -- was also hit hard, suffering 24.4% revenue declines over the previous quarter to $885 million, on shipments increasing 13%. In market share, Elpida slipped one slot to #4, giving the #3 position back to Qimonda, the former DRAM division of Infineon with fabs in Virginia.
Not to say Samsung didn't also take a hit. The world's leading supplier saw a 16.7% quarterly decline in DRAM revenue as well. But iSuppli is known for finding silver linings in even the worst statistics, and this time, Samsung gets the silver.
Because so many other companies fared worse, its global market share rose by 1.5% to 24.2%. Following it on the uptick was #5 Micron, which gained a full point of market share to 10.1%, signaling that the US-based DRAM company may not be as vulnerable as analysts once feared.
Who weathered the storm completely? Tiny #9 Etron, which saw a 10.6% boost in revenue to $94 million, even though its unit shipments increase didn't make the charts.
ISuppli judges "units" in this case by converting all configurations of DRAM sold as though they were multiples of 512 Mbit components. Given that fact, it's an academic procedure to find out who among iSuppli's top eight earns the most per half-gigabit shipped.
While #1 supplier Samsung makes about $3.37 per half-gigabit, #5 Micron comes close behind with $3.33. #3 Qimonda comes in third on this scale at about $2.94 per half-gigabit.
I guess we should all thank slower-than-predicted Vista adoption for lower memory prices ...
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You must be confused. Vista requires MORE memory to run smoothly, not less. That would mean a BOOST in sales not a hit on sales. BUT, what does your comment have to do with DRAM anyway?
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He means - with demand for RAM intensive applications and or operating systems being down - the manufacturers overestimated the market which means more stock lying around and lower prices to liquidate the stock on hand - better value for the consumer - which is a good thing considering how flakey the overall component market is these days...
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I am seeing this from the point of view of the consumer not the investor. Though I agree with your assesment, I do remember the late 90's when RAM in general was very, very expensive. As production drops and backstock is used up, the price will go up again.
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Supply and Demand :-)
Do I think ram will reach prices it was in mid to late 90's - no. But you are correct in pointing out that prices will rise as available stock diminishes and manufacturers cut back on production to wait for the next big 'thing'.
Sadly I feel that will totally depend on cpu/motherboard manufacturers - and there is allot on the horizon but none of it proven for general end user release yet (by general end user I am referring to the average PC enthusiast who still only knows how to plug things in without understanding what they actualy do).
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