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Global Mobile DRAM Revenue Rose 16.8% Sequentially in Third Quarter, Says TrendForce

24 November 2016 Semiconductors Avril Wu

DRAMeXchange, a division of TrendForce, reports that sales of mobile DRAM surged in the third quarter as the smartphone industry was in its traditional inventory buildup season and the global DRAM market enjoyed an across-the-broad price increase. Consequently, the mobile DRAM revenue for the quarter rose by about 16.8% sequentially to around US$4.59 billion.

“The market releases of Apple’s iPhone 7 and Samsung’s Galaxy Note 7 generated a large wave of stock-up demand in the global mobile DRAM market during the third quarter,” said Avril Wu, research director of DRAMeXchange. “Even though Samsung later had to discontinue the production of Note 7 in the fourth quarter, the launch of the flagship device already contributed significantly to the third-quarter mobile DRAM sales.”

The conversion of suppliers’ third-quarter mobile DRAM revenues into market shares reveals that Samsung grew its market share to 64.5%, while SK Hynix and Micron respectively held on to 22.8% and 10.6%. Collectively, the top three DRAM suppliers represented about 97.9% of mobile DRAM market worldwide. The fourth-largest mobile DRAM supplier in the third quarter was Nanya and its global market share was only 1.3%.

“Mobile DRAM also accounted for 43.5% of the total DRAM revenue worldwide in the third quarter,” Wu pointed out. “Going forward, Samsung’s competitors in the smartphone market will try expand their device production and shipments to capture the market share that Samsung lost due to the Note 7 incident. At the same time, prices of mobile DRAM will still be going up. Thus, sales of mobile DRAM are expected to make up a greater share of industry’s revenue in the fourth quarter.”

Samsung remains the technology leader and has the most profitability among the top three suppliers

Among the top three DRAM suppliers, Samsung is still the leader in the mobile DRAM market. In addition to achieving a high level of maturity for the 20nm production, Samsung are sending its LPDDR4 16Gb mono-die chips to clients for sampling this fourth quarter. For this particular product, Samsung is technologically ahead of its competitors. If the verification process goes smoothly, the smartphone market will likely see high-end devices with 8GB of memory next year. Also, Samsung’s 18nm process is expected to become available for mass production in 2017. Having this technology would further improve the profitability of the company’s semiconductor business.

SK Hynix has steadily raised the yield rate on its 21nm process. To take advantage of the busy season for the smartphone market, the supplier also expanded the mobile DRAM wafer capacity for the 21nm process in the third quarter. SK Hynix plans to increase its competitiveness by improving its 21nm yield rate and preparing for the trial production of its 18nm technology that is scheduled for the second half of 2017.

To improve its financial situation, Micron has used both its 20nm and 25nm technologies to produce mobile DRAM. Micron has also assigned its subsidiary Inotera to focus on fulfilling Apple’s orders because Inotera has been the quickest in transitioning to the 20nm manufacturing. As for orders from other smartphone brands, Micron has directed them to its fab in Hiroshima and its other subsidiary Micron Memory Taiwan. The Hiroshima fab and Micron Memory Taiwan produce mobile DRAM mainly on the 25 process. On the technology migration front, Micron expects the adoption of the 18nm process to begin next year.

Regarding Taiwanese mobile DRAM suppliers, Nanya managed to grow its global market share to 1.3% in the third quarter, up from 1.1% in the second quarter. As prices of mobile DRAM kept climbing, Nanya expanded the share of this product in its overall output. Also, Nanya is currently working on its 20nm process that will become part of its mobile DRAM capacity next year.

Winbond’s mobile DRAM market share remained constant at 0.8% in the third quarter. Winbond’s overall DRAM revenue however increased during the same period on the back of slight price increases for its ASIC and other customized products. Winbond may begin small-scale production on its 38nm process this year, with priority products being specialty and mobile DRAM.

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