With DRAM prices stabilizing and starting to rise, chip suppliers that operated in the red in the fourth quarter of 2011 are expected to see their quarterly losses narrow sequentially in the first quarter of 2012, industry sources believe.
Companies that still use 4Xnm process technology to manufacture chips are accelerating their transition to 3Xnm nodes, with an aim to break even, the sources indicated. The firms are also diversifying their product offerings to include server-use DRAMs, and mobile RAM memory targeted at smartphone and tablet applications, the sources observed.
The shrinking market for conventional PCs eroded DRAM chipmakers' profitability during 2011. In particular, Taiwan-based players all reported losses for the year and lost market share to larger rivals such as Samsung Electronics, the sources pointed out.
Those second-tier DRAM suppliers have moved to turn their focus away from the PC DRAM market, with some such as Nanya Technology allocating more of their capacities to products for servers and mobile consumer devices, and the other group including Powerchip Technology and ProMOS Technologies expanding their foundry businesses.
Inotera Memories, a DRAM-manufacturing joint venture between Nanya and US Micron Technology, and Elpida Memory's production subsidiary Rexchip Electornics, have both shifted their emphasis to the production of server DRAM and mobile RAM chips in line with their investors' strategies.
In other news, Micron reportedly will purchase additional stake in Inotera making it the largest shareholder of the DRAM joint venture.