DRAMeXchange: 1Q09 Revenue of WW DRAM Industry Declined 22.3%

According to DRAMeXchange’s survey, the DRAM contract price dropped to US$ 0.8/Gb in 1Q09, which is near the material cost of DRAM vendors. DRAM makers’ cutting capacity didn’t help pushing the prices up as PC OEMs tried to lower their inventory level after suffering the sharply decreasing demand starting from October ’08. DDR2 1Gb contract quarterly average price dropped around 25% in 1Q09. The spot price once rebounded to US$ 1.2/ Gb after PSC’s vast capacity cut and Qimonda announced bankruptcy, resulting in a stabilized 1Q DDR2 1Gb quarterly average spot price.
 
1Q09 DRAM revenue dropped 22.3%, which is attributed to the contract price decline, capacity cut and the bankruptcy declaration from Qimonda. Compared with other vendors, PSC and Winbond show the market share growth in terms of brand-owned revenue due to the output production translating back from OEM partners.

Here are two tables done by DRAMeXchange for the reference of WW DRAM vendor revenue ranking.

The main table “Figure-1” is the revenue ranking by DRAM vendor own brand: The revenue in the table is using the results which were announced by the DRAM vendors and deduct the non-DRAM business revenue, then converted the number into USD basis with the average 1Q foreign exchange rate. This table is based on the vendor brand revenue basis.

The second table “Figure-2” is based on the fab manufacturing basis, the revenue is calculated and ranked by the total chip production revenue of the vendor’s fabs. Thus the revenues of pure manufacturing vendors such as Rexchip and Inotera were independently listed. The Rexchip portion is excluded from the revenue of Elpida, the Inotera portion is excluded from the revenue of Nanya Technology. The reason we post the second table is because of the outsourcing percentage varied in 1Q09 and this effect will impact on Taiwanese vendor's revenue and market share ranking. 
 

1. WW Brand-Owned Revenue Ranking for DRAM Vendors

According to DRAMeXchange, 1Q09 DRAM revenue decreased 22.3% QoQ. Despite of the declining contract price, output cut down by 7.7%, 8.6% and revenue shrunk by 16.1%, 16.3% respectively. Samsung and Hynix proved a market share growth (26.5% and 22.3%). Samsung still ranks No.1 followed by Hynix, resulted in the outperformed operation in first quarter.

For the different accounting period (1Q for Micron is Dec., Jan. and Feb.) it recorded, Micron demonstrated the greater market share drop to 15.2% from 16.9% in 4Q with 35% contract price decline in last period (4Q for Micron is Sep., Oct. and Nov.). In March Elpida started to receive all output production from Rexchip with the OEM shipment termination from PSC and revised capacity cut from Japan facility, the total production has descended in 1Q. The 1Q revenue is down 24.5 % QoQ compared with 4Q08. Qimonda filed bankruptcy in corporate restructuring process in 1Q. The termination of OEM outsourcing from Inotera and Winbond and shut down the U.S. facility has resulted in the huge market share drop. Market share in 1Q is merely 4.7%.

As for Taiwanese vendors, PSC announced US$ 115M in 1Q09 with -32% QoQ. Instead of contract manufacturing for Elpida, the capacity was used for own brand products. Thus, the own brand market share surprisingly grew to 17.4%. Winbond announced US$ 92M in 1Q with -20% QoQ. Despite of revenue decline, Winbond's brand-owned market share increases 9.6% because of the output translation to brand-owned products since Qimonda filed bankruptcy. With the contract price decline, Nanya's revenue merely shrunk 3.7% QoQ due to the raising portion in spot market and effect of 2-weeks-degree inventory clearance. Due to the Qimonda bankruptcy and revenue decline 55% in 1Q, Nanya jumped to No.5 place in terms of brand-owned revenues. (See Figure-1)

Note:
Figure-1: For Samsung 1Q DRAM revenue, we approximatively derived the result by deducting LSI revenue from semiconductor based on the assumption that DRAM accounts for 48% in memory sectors and 1Q average exchange rate is USD to KRW / 1:1414. We apply this estimation to other vendors by indicating 76% for Hynix's total revenue, 79% for PSC, 90% for ProMos, 94% for Nanya and 80% for Winbond under the following exchange rate: USD to NTD/ 1:33.97, USD to JPY/ 1:93.63, USD to EUR/ 1:0.767.

2. WW DRAM Chip Production Market Share of DRAM Vendors (By Country)

Korean vendors accounts for 48.8% in terms of DRAM chip production market share and branded-own revenue are consistent with production revenue now since Hynix stopped outsourcing from financial struggling ProMos in 1Q. Taiwanese vendors used to have larger portion of OEM and this situation has changed dramatically in 1Q. Except for ProMos' case, PSC stop OEM shipment to Elpida while Winbond and Inotera stop the OEM shipment due to the Qimonda bankruptcy. The Taiwanese vendors’ market share has dropped to 19.2% from 23.2% because of the capacity cut. Micron's share slightly decreased to 15.3% while Elpida's increased to 12.1%. (Figure-2 and Figure-4)

3. WW Own Brand Market Share of DRAM Industry ( By Country)

The Korean vendor's share accounts for 50.1% (exclude others) and its leader position remained unchallenged in 1Q. Taiwanese vendors' share slightly increase to 13.6% from 11.8% due to the production adjustment by PSC, Nanya and Winbond. The rest market shares are occupied by Japanese vendors (15.8%) and American ones (15.7%). 

Revenue Ranking of NAND Flash Branding Companies in 1Q09

The 1Q09 total revenue of WW NAND Flash Branding companies was US$ 2.086 billion, dropped 2.4% from US$ 2.137 billion in 4Q08. We see revenue gains and losses among the companies. Although the industry was still under the continuing impact of global recession and weakening demand, the price remained stable because certain NAND Flash makers adjusted their supply strategies. The overall average selling price increased 18% QoQ and the total shipment dropped 17% QoQ in 1Q09.

The 1Q09 NAND Flash branding company revenue ranking: Samsung’s revenue was US$ 750 million, accounted for 36.0% of the market revenue and remained its number one position. Toshiba’s revenue was US$ 740 million, accounted for 35.5% of the market revenue as number two. Micron surpassed Hynix with the 1Q09 revenue of US$ 200 million, accounted for 9.6% of the market revenue as number three. Hynix this time dropped to number four position with the revenue of US$ 171 million. The revenue of Intel was US$ 155 million as number five position. Numonyx was at number six position with the revenue of US$ 70 million.

As far as Samsung is concerned, although the 1Q09 ASP went up, the shipment decreased. Under the influence of slow season, output reduction, and delaying new process, the supply bit growth declined. The demand of NAND Flash major applications, such as mobile phone and other consumer electronics products all had weakened in 1Q09. Even with increasing ASP, the revenue of Samsung remained stable. The Samsung 1Q09 sales revenue was US$ 750 million, and its market share increased from 34.9% in 4Q08 to 36.0% in 1Q09. Samsung remained its number one position of the industry.

The Toshiba NAND Flash ASP increased but the supply decreased due to production cut. Its 1Q09 revenue remained stable and was at the US$ 740 million level. Its market share was 35.5%, slightly increased 1% comparing to 4Q09.

Micron became number three with its US$ 200 million 1Q09 revenue. Its 1Q09 ASP and shipment both dropped. Micron owned 9.6% market share in 1Q09. The 1Q09 ASP of Hynix increased, but its shipment decreased due to production cut. The 1Q09 revenue of Hynix was US$ 171 million, dropped 22.3% QoQ. Hynix’s market share slid down to 8.2% this quarter.

The 1Q09 revenue of Intel was US$ 155 million, and its market share slightly increased to 7.4%, which is a little better than in 4Q08. The 1Q09 revenue of Numonyx remained stable and estimated to be US$ 70 million. The 1Q09 market share of Numonyx was 3.4%, which also slightly increased from the previous quarter.