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TrendForce: Mobile DRAM to Become Mainstream in 2014, Global Revenue Increases by 14 % in 3Q13

19 November 2013 Semiconductors Avril Wu

According to DRAMeXchange, a research division of TrendForce, the mobile DRAM price reductions have eased due to the increased number of Q3 smartphone shipments and SK Hynix's Wuxi plant fire accident. Looking at the market, the Q3 mobile DRAM revenues have jumped by an estimated 14% QoQ to US$ 3.3 billion, representing more than 30% of the entire market's DRAM revenue. The revenue number has a chance of increasing further should future shipments continue to rise.

Observing the mobile DRAM companies' rankings, TrendForce's assistant vice president Avril Wu notes that the two main Korean manufacturers' market shares are continuing to grow and currently add up to a total of 76.3%. Given that Samsung's market share alone is already more than 50%, both its pricing and product strategies are expected to affect the future productions of mobile DRAM considerably. In the periods ahead, further impacts on the mobile DRAM industry are likely to arise from the changes experienced by Micron's supply chain following its official merger with Elpida. With the potential changes affecting the structure of market demand, the shipment of mobile DRAM is likely to officially surpass that of PC DRAM in 2014.

Samsung to Use Third Party Components for Smartphones, SK Hynix to be the Greatest Beneficiary

Samsung's mobile DRAM market share has improved from 50.3 % in 2Q13 to 51.3% in the following quarter. Given that the Korean company's Galaxy devices are expected to use mobile DRAM components from both SK Hynix and Micron, TrendForce projects that Samsung's future market share will end up being around 40%~50%. With its emphasis shifting from market share to profits, Samsung will likely place an increased amount of focus on improving the time-to-market (TTM) for its next generation LPDDR3 and 6Gb mono products.

SK Hynix's mobile DRAM market share appears to be largely unchanged from the previous quarter, decreasing slightly from 25.7% to 25%. Its mobile DRAM revenue, on the other hand, showed an increase of approximately 10.8% QoQ. In China, the growth of SK Hynix's smartphone market share appears to be persisting thanks to the reservations various branded manufacturers hold towards Samsung’s components. Looking at the future, both SK Hynix and Samsung have equally impressive plans for their mobile DRAM products: both are in the process of migrating towards the 25nm manufacturing process, and both have already delivered samples of LPDDR3 6 Gb to their clients. The distance between the two companies will likely grow smaller as Samsung begins to look elsewhere for its mobile components.

New Micron Group Shows Potential despite Shrinking Market Share

The new Micron group's mobile DRAM market share – combined for the first time for the purpose of assessing the Q3 revenue rankings — has reached 22.1% in 3Q13, while its Q3 revenues grew by 10.7% QoQ. The increase in its revenues is mainly due to the growing demand for Apple products during the peak quarter, which prompted Rexchip, Elpida’s subsidiary branch in Taiwan, to take steps to raise its entire mobile DRAM production. Other than smartphones and tablets, products such as Apple's MacBook Air (which uses LPDDR3) and higher DRAM capacity per unit are also likely to strengthen Micron's future development. In the periods ahead, it is believed that the merger between Micron and Elpida will help enable the two companies’ mobile DRAM product line to be more complete. The MCP and eMCP products, in particular, are likely to provide a noticeable boost to the new Micron group’s 2014 revenues.

Taiwanese DRAM Manufacturers to Direct Attention towards Large Density Mobile DRAM and China Market, Partner with Module Manufacturers on eMCP

Winbond's mobile DRAM revenue has decreased by approximately 20% compared to the previous quarter, giving it a global market share of 0.7% and a mobile DRAM revenue share of 13%. Due to the changes taking place in the entire global smartphone market and the lowered shipments of feature phones, the shipment performances of small density DRAM have become increasingly weaker. Other than developing various mid to low density mobile DRAM for 4G/LTE Basebands, Winbond has begun to shift much of its attention towards the larger density LPDDR1 and LPDDR2 products, and is currently getting ready for the mass production phase. In the future, the Taiwanese company is likely to begin taking advantage of the foundry services provided by Powerchip, which uses a more advanced manufacturing process. This will help the company lower its overall manufacturing cost.

Looking at Nanya, given that its mobile DRAM has officially entered mass production, its Q3 revenues were able to jump by nearly 200% QoQ. Its market share, meanwhile, rose from 0.3% in 2Q13 to 0.9% in the following quarter. At the moment, LPDDR2 4Gb is among the notable products that are ready to be mass produced (the mass production of the other major product line, LPDDR3 4Gb, is likely to follow soon after). With Nanya's mainstream manufacturing process involving 30nm technology, the company has a legitimate shot of competing effectively against a number of first tier manufacturers. Nanya's current plans are to focus on promoting its mobile DRAM products in China and to work with first tier module manufacturing plants on making eMCP products.

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