Kingston Technology padded its dominance of the third-party DRAM module business in the first half of 2010, selling US$2.6 billion worth of DRAM modules, according to iSuppli. The figure showed 45.6% growth compared with the same period of 2009.
Kingston's performance massively outperformed the overall DRAM module market, which expanded by 26% during the same period, iSuppli noted.
"Kingston in the first half effectively used its DRAM module market dominance as a competitive weapon against its smaller rivals," said Clifford Leimbach, an analyst covering memory demand forecasting at iSuppli. "Because of its large size, Kingston has more buying power than any other third-party module maker, allowing it to obtain more favorable pricing for DRAM. Kingston passed on these lower prices to its customers, undercutting the competition."
Kingston held a 45.8% share of the global third-party DRAM market in the first half of 2010, up from 39.6% in second-half 2009, according to iSuppli.
"With large quantities of DRAM on hand, Kingston is nimble enough to shift its sales to the customer base that will generate the highest profit at any given time, whether to the PC makers or directly to consumers," Leimbach observed.
To put Kingston's performance into perspective, the company's revenues in the first half rose by US$802 million sequentially - more than twice the amount of the next four largest suppliers combined, iSuppli said. The leading supplier's market share gains came at the expense of nearly every other third-party DRAM module maker.
Kingston's robust performance came amid a period of strong expansion for the global third-party DRAM module business, iSuppli indicated. Module sales were propelled by the recovery in the PC business in early 2010.
The PC industry recovery was amplified in the module business. Module market conditions recovered dramatically in 2010 after a 2009 when the situation was exceedingly dismal because of an oversupply of products and a rise in inventories - events that led to a major decline in pricing, iSuppli said. With the situation improving so dramatically, global third-party DRAM module revenues in the first half of 2010 amounted to 75% of the revenues for the entire year of 2009.
While market growth is slowing in the second half, 2010 will still be a great year for the DRAM module market, iSuppli said. The entire DRAM module market, including both third-party suppliers like Kingston as well as DRAM companies that produce their own devices, will amount to US$31 billion in 2010, up 73% from US$18 billion in 2009.
This year will represent the peak of the DRAM module market for the next several years, with revenues declining from 2011 through 2013, according to iSuppli. Although the DRAM content per module will continue to rise for the foreseeable future, DRAM chip price declines will decrease more quickly, causing revenues to decline.