Laboring under the combined weight of a seasonal slump and sharply lower average selling prices, the market for mobile dynamic random access memory (DRAM) posted lackluster results in the first quarter, according to a DRAM Dynamics brief from information and analytics provider IHS.
Global mobile DRAM revenue fell to $2.2 billion, down from $2.6 billion in the fourth quarter of 2012, and its share of the total DRAM market shrank. Mobile DRAM, used for mobile devices like smartphones and tablets, lost out to the normally staid segment of PC commodity DRAM, riding high at present because of elevated prices.
In the first quarter, mobile DRAM accounted for 28.5 percent of overall DRAM shipments, down from 28.8 percent. And while total DRAM shipments grew 2.4 percent during the period, mobile DRAM underperformed the industry with just a 1.4 percent uptick.
Mobile DRAM has lost share to commodity DRAM a few times before, but its current trough is compounded by a hard fall in average selling prices, down 15 percent from the fourth quarter. The latest pricing drop is the second-largest in the last six quarters, exceeded only by the 17 percent decline of the third quarter last year.
Given the steady decrease in its pricing over time, mobile DRAM is almost at pricing parity with commodity DRAM, generating similar revenue per wafer. If commodity DRAM continues its rally into the second half, then margins for mobile DRAM will be less attractive than for commodity DRAM—a situation that hasn’t occurred for a number of years.
However, if mobile DRAM prices turn around and head up, revenue could exceed $6 billion in the second half and put mobile DRAM back on the winning block.
And overall, mobile DRAM faces better prospects in the years ahead than commodity DRAM, especially as smartphones and tablets continue to broaden their use among consumers at the expense of PCs.
Samsung still rules, even if it loses share
South Korea’s Samsung Electronics continued to rule the mobile DRAM roost with a hefty 52 percent market share in terms of revenue, but its portion in the first quarter was actually down 2 percentage points. Revenue fell 18 percent during the period.
No. 2 SK Hynix, also of South Korea, suffered an even larger quarterly contraction in revenue of 26 percent, even though it posted a solid 40 percent increase on a year-over-year basis. Market share for SK Hynix fell to 22.3 percent, down almost 3 percentage points.
Elpida Memory of Japan, awaiting final integration with U.S. buyer Micron Technology, had the third-largest mobile DRAM revenue during the period. But unlike the two behemoths that precede it in ranking, Elpida registered growth, and revenue was up 7 percent. Its market share expanded accordingly, rising a hefty 4 percentage points to 20.6 percent.
Micron, which is only starting to grow its mobile DRAM portfolio, saw the largest growth within the group at 48 percent, given the small mobile DRAM base from which it continues to expand. Its share climbed a couple of percentage points as a result, pausing for the moment at 4.2 percent.
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