In a strong first quarter for DRAM sales, Taiwan-based Powerchip Technology (formerly Powerchip Semiconductor) posted a standout performance that allowed it to move up to the fifth position in the market.
Powerchip sold US$432 million worth of DRAM in the first quarter of 2010, up 80.8% from US$239 million in the prior fourth quarter, and an astounding increase of 1,068% from US$37 million a year ago. This marked the strongest performance of all DRAM suppliers ranked by the research firm in the quarter and far exceeded the total industry's performance.
Powerchip's revenue has increased nearly 60% during each of the last three quarters. This caused the company's ranking to rise from sixth place in the fourth quarter of 2009 and from ninth in the first quarter of 2009.
"Powerchip's astounding rise is due to a significant increase in output and an improvement in product mix, which lifted its average DRAM selling price," a analyst said . "While still small compared to the dominant market leaders - Samsung Electronics and Hynix Semiconductor - Powerchip has a lot of available wafer capacity and, if matched with the right technology, can be a serious competitor in the global DRAM market."
Powerchip is engaged in a head-to-head market share battle with fellow Taiwanese firm Nanya Technology. Between Nanya and Powerchip, the battle for fifth place has switched back and forth a number of times, with Nanya prevailing in nine out of the last 13 quarters. Nanya, however, fell to No. 6 in the first quarter of 2010 and had roughly 4% market share.
Chaebol champs
With 33% share, Samsung padded its No. 1 position in the market in the first quarter of 2010. The vendor's DRAM revenues amounted to US$3.07 billion in the quarter, up 10.0% from US$2.79 billion in the fourth quarter of 2009, and up a massive 169.3% from year-ago revenues of US$1.14 billion.
In second place was Hynix, with revenues for the same period reaching US$2.05 billion, up 8.5% from US$1.89 billion in the prior fourth quarter. Hynix's revenues for the first quarter also reflects a spectacular 188.7% leap from a mere US$716 million during the same quarter of 2009.
With market share for Hynix standing at 22%, the two top players enjoyed a combined share of 54.3% in the first quarter of 2010.
The rest of the Top 5 included Japan-based Elpida Memory, with a 17% market share; Micron Technology of the US, with a 15% share; and Powerchip with a 5% share. All told, the Top 5 DRAM players accounted for a whopping 90.7% of market revenues.
Although the DRAM market has been growing rapidly in recent quarters, it is unlikely that expansions of such scale will extend for more than one more quarter in 2010. For one, ASPs are losing some of the steam from last year. Furthermore, DRAM bit production growth is rising from the low levels seen in 2009 - increasing part availability and placing further downward pressure on pricing.
Nonetheless, iSuppli does not anticipate any major upheavals in the market, and the top players should continue to hold sway. No manufacturer has significant new capacity coming online except for Samsung, whose additions will only further cement its position at the summit. With capex in the memory market worth of US$7.8 billion, Samsung will far outspend its competitors, many of which appear reluctant to commit to any rapid additional spending.
Beyond 2010, however, the DRAM landscape looks less certain, and capex decisions made during the next six months will have a significant impact in 2011 and 2012.