Samsung Electronics' aggressive investment in advanced manufacturing technology paid off in spades in the second quarter of 2010, allowing the company to outproduce competitors and expand its lead in the global DRAM technology market.
With revenues of US$3.8 billion in the second quarter, Samsung's DRAM revenues expanded by 24.3% from US$3.1 billion in the first quarter, the highest growth rate among the top-five suppliers. The rise gave Samsung a 35.4% share of global DRAM revenues in the second quarter, up from 32.6% in the first.
"Samsung's memory business long has pursued a strategy of taking the leadership in investment in new manufacturing processes, allowing it be the first to move to advanced semiconductor process geometries, and thus enabling the company to make semiconductors at a lower cost and at greater efficiency than its competitors," said senior analyst. "The company's aggressive push into 40nm semiconductor lithography for DRAM manufacturing boosted the volume of its bit production dramatically. Meanwhile, Samsung's broad DRAM portfolio, including high-end devices like mobile and legacy parts, allowed it to achieve an ASP higher than the industry average."
Samsung in the second quarter produced 1.2 billion 1Gb-density-equivalent DRAM units, up 13% from 1.1 billion in the first. The company's DRAM ASP was US$3.13 in the second quarter, compared to the industry's DRAM price average of US$3.03.
DRAM's dramatic growth
DRAM industry revenues in the second quarter soared to US$10.8 billion, up 14.4% from US$9.4 billion in the first. Growth was driven by a nearly 5% increase in bit shipments and a 9% rise in ASP.
From a revenue perspective,the second quarter was the best that the industry had seen since the end of 1995. Shipments for the period came in at 3.56 billion 1Gb-equivalent units, the highest level ever. Likewise, the US$3.03 ASP for all DRAM parts is unequalled since the third quarter of 2008.
Elpida expands
The second strongest growth among the top-five DRAM suppliers was posted by Elpida Memory, which achieved a 17.7% increase in revenues to US$1.9 billion, up from US$1.4 billion in the first quarter. Elpida's robust performance was because of its higher-than-average shipment growth of 8% as well as an improved product mix.
Micron muddles along
Micron Technology posted the weakest growth among the top-five DRAM suppliers in the second quarter, with revenues rising by 4.1% to US$1.43 billion, up from US$1.38 billion in the first quarter. Micron struggled during the second quarter, likely due to manufacturing challenges at its Inotera facility.
"Inotera has had the daunting task over the past few quarters of not only transitioning to the 50nm process node but also of migrating from Qimonda's trench technology to Micron's stack technology," Howard said. "Once it is past this challenge, which appears to be the case, Inotera should be able to achieve outstanding bit growth for the duration of 2010."
Micron's market share slipped slightly to 13.3%. At the same time, however, Micron comfortably enjoyed the highest ASPs in the industry by a sizable margin. Clearly, its product portfolio and keen targeting of high-value market segments helped the company mitigate its manufacturing shortcomings.