Samsung could be in danger of losing its DRam memory crown after Hynix stunned the market with a strong first quarter performance.
South Korean memory manufacturer Hynix recorded DRam revenues of $2.2bn in the first quarter of 2007, up 4.1 per cent from $2.1bn in Q4 2006. However, the gains were made in a quarter when the overall revenues for the troubled DRam sector dropped by almost 10 per cent and every other major DRam maker suffered a decline in revenues. As a result, Hynix saw its market share hop from 19.2 per cent in Q4 last year to 22.2 per cent, putting it within striking distance of dominant market leader Samsung.
Samsung turned in Q1 revenues of $2.5bn, a fall of 15.9 per cent against Q4 2006. This led to its first place market share shrinking to 26.1 per cent, compared with 28 per cent in Q4.
Nam Hyung Kim, director and principal analyst for iSuppli, said: “Hynix rocked in the first quarter. The company’s strong performance was due to its higher-than-expected production using 80 nanometre process technology and its capacity reallocation from NAND to DRam. Meanwhile, Samsung suffered a revenue decline because of its limited capacity growth during the quarter.”
Hynix also made gains in DRam shipments, surpassing Samsung and taking the number one position in the unit ranking in the first quarter for the first time. It boosted its shipments by a massive 45 per cent, shipping nine million more units than Samsung.
Gartner has also noted that Samsung’s dominance in the DRam sector could be under threat. According to its own figures, Samsung’s Q1 share of the market dropped to 25.5 per cent, just 2.7 per cent above second place Hynix.
Andrew Norwood, Gartner research vice-president for semiconductors, said: “It looks like the DRam industry is returning to a market share battle with little regard for profitability and all vendors are going to suffer.”
Fourth place Elpida from Japan also performed surprisingly well in Q1, noted iSuppli, increasing its share to 12.4 per cent, up from 11.2 per cent in the fourth quarter of last year. Having displaced Micron last year, there is now only a small gap between it and third place Qimonda.
Meanwhile, 2007 is shaping up to be a tough year in the DRam memory market, iSuppli claimed. Average selling prices have plummeted by 26 per cent during Q1.
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