DRAM market hit bottom in Q2, iSuppli reports

By Colleen Taylor, Contributing Editor -- 7/27/2007

The DRAM market went through a "terrible" Q2, iSuppli Corp. confirmed in a report issued today, as DRAM's per-megabit average selling price (ASP) plunged 39 percent during the quarter.

According to iSuppli, a major culprit behind the poor market conditions was a rise in part availability, with megabit shipments increasing by 23 percent during the period, fueling a situation of severe oversupply in the market.

In Q2, the firm said, global DRAM revenue declined by 24.1 percent sequentially, falling to $7.3 billion in Q2 from $9.7 billion in Q1.

In further evidence of the market's troubles, iSuppli said that Samsung Electronics Co. Ltd. and Micron Technology Inc., which suffered 16.7 percent and 15.7 percent respective declines in revenue during the quarter, actually significantly outperformed the market and gained share.
In fact, just one supplier among the top-10 DRAM makers, Etron Technology Inc., managed to grow its revenue during Q2.

Things could soon start to look up for the beleaguered DRAM makers in the coming months. Looking ahead to the second half of the year, iSuppli said that the top-five suppliers, Samsung, Hynix, Qimonda, Elpida and Micron, all provided production guidelines for Q3 that were lower than their shipments in Q2. The firm predicted that this reduced supply growth in Q3, along with a seasonal demand pick up, will stabilize market conditions in the second half of the year.

"The market clearly hit the bottom in the second quarter, and the suppliers' profitability will be much better in the second half of the year," iSuppli said in its report.

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