Micron muscles back up to top 3 spot in DRAM ranking
It has been a shaky year for DRAM makers, but Micron Technology has made progress climbing in the top 10 supplier rankings by restructuring and investing in 300-mm production.
By Gail Flower, Contributing Editor -- EDN, May 13, 2009
Micron Technology Inc managed to return to the top three DRAM rank in Q1, according to an iSuppli Corp report.
In Q1, Boise, Idaho-based Micron increased its share of global DRAM market to 14.6%, up from 13.8% in Q4 and up from 11.3% in Q1 2008. This represents a comeback from its low point and fourth rank in Q1 of 2006. In the March quarter, Micron squeezed past Elpida, now in the fourth spot.
“Micron’s comeback poses a risk to the health of the DRAM industry and threatens the leading players in the market,” said Nam Hyung Kim, iSuppli's director and chief analyst for memory ICs, in a statement. “Until 2003, the company had been a solid No. 2 behind Samsung, but had seen its share decline due to its effort to diversify its product line beyond DRAM and its lateness to invest in 300-mm fabs.”
In 2008, after launching Aptina Imaging, a CMOS image sensor division, Micron purchased Qimonda’s stake in Taiwan-based Inotera Technologies, increasing its capacity at a bargain price.
Capacity is not the problem, however. The imbalance of supply and demand and decrease in the per-gigabit ASP (average selling price) compared to the preceding quarter are some of the DRAM maker's issues, according to Micron’s Q2 fiscal 2009 report. By producing DRAM on 300-mm wafers instead of its original 200-mm capacity, Micron can reduce the cost per gigabit through reduced production costs, and therein lies one advantage.
“However, Micron’s success in acquiring a bigger piece of the market will depend on how quickly the Inotera fab converts from Qimonda’s old process technology to Micron’s stacked technology,” said Kim. More investment funding will be needed before the necessary equipment and knowledge is in place for speedy production.
After a difficult 2008, the DRAM industry continues to suffer from over production and excess inventories. Global DRAM revenue in Q1 2009 declined by 20.1% compared to Q4 and by 44.1% from the first three months of 2008, according to data from iSuppli. The DRAM per-megabyte ASP in Q1 declined by 8% and shipments of megabyte units dropped by 13% compared to Q4. Megabyte unit shipments grew 10% in Q1 this year compared to last year’s Q1 figures, indicating that more production cuts are needed to accelerate market recovery, iSuppli said.
In Q1, Micron outperformed the sinking DRAM market, gaining market share by limiting its revenue decline to 15.4% compared to Q4. All of the top 10 DRAM makers suffered sequential declines in revenue, except for Nanya. Qimonda’s move to stop all DRAM production boosted Nanya’s entrance in the top-five rank. Samsung, easily the largest supplier of DRAM, minimized its revenue decline to 8.4% in Q1, giving it a total of 34.3% market share in Q1, according to iSuppli.
