Global DRAM revenues rise 15.8% in 3Q16, says DRAMeXchange

From : DIGITIMES



Jessie Shen, DIGITIMES, Taipei [Thursday 17 November 2016]

Sales in the global DRAM market increased 15.8% sequentially in the third quarter of 2016, buoyed by rising prices, according to DRAMeXchange.

DRAM suppliers started to reduce their output of PC DRAM in the second quarter while increasing production of server and mobile DRAM products, DRAMeXchange said. Prices have therefore been going up as supply is tight.

The rally in PC DRAM prices have also pushed up prices for DRAM chips used in other applications simultaneously, DRAMeXchange indicated.

On the demand side, better-than-expected notebook shipments during the third quarter drove demand for DRAM memory. "The shipment share of notebooks equipped with 8GB of RAM has risen as well," said Avril Wu, research director of DRAMeXchange. "Hence, the average contract price of PC DRAM is projected to increase by more than 30% sequentially in the fourth quarter of 2016."

Samsung Electronics continued to lead the global DRAM market in the third quarter with revenues rising 22.4% sequentially, while second-ranked SK Hynix' revenues grew by a smaller 8.6% on quarter, DRAMeXchange said. Samsung held a 50.2% share of the market during the quarter followed by SK Hynix with a 24.8% share.

Micron Technology saw its DRAM revenues increase 12.6% sequentially in the third quarter, and grabbed a 18.5% share of the global market, DRAMeXchange said.

Samsung managed to keep its operating margin at 37% in the third quarter, while SK Hynix' operating margin climbed to 25% from 18% in the prior quarter, DRAMeXchange said. Micron saw its operating margin swing to 2.3% in the third quarter from negative 0.6% in the second.

Looking at suppliers' operating margins, Samsung was again the leader in the third quarter by keeping its operating margin at 37%. SK Hynix saw a rise from 18% in the second quarter to 25% in the third quarter. Micron's operating margin for the third quarter was 2.3%, a significant turnaround from the negative 0.6% in second quarter.

"Further increases in suppliers' operating margins are expected for the fourth quarter on account of rising DRAM prices," Wu continued.

Samsung remains the technology leader with the lowest production cost among the three major suppliers. "Samsung's new fab Line 17 has started DRAM production on the 18nm process in the second half of 2016," Wu noted. "However, Samsung is still pondering whether to continue expanding its 18nm production due to the concern about the technology's effect on the profit margin."

SK Hynix is still striving to improve the yield rate of its 21nm production, DRAMeXchange indicated. Nevertheless, the company is looking to move a newer 18nm node to risk production in the second half of 2017.

Micron now uses 20nm process technology to make DRAM chips as subsidiary Inotera Memories made a complete transition to the technology in September, DRAMeXchange said. Micron plans to move its 18nm and 16nm processes to mass production during 2017-2018.