Market Insight

It was reported today that Powerchip is exiting DRAM. Is it really? Powerchip has seen its DRAM market share (revenue basis) drop over the past year from 4.6% in Q1 2010 to just 2.3% in Q4 2010. From this perspective Powerchip has been losing market share and slowly exiting DRAM. With today’s revelation that it would begin shipping all of its PC DRAM to Elpida to be sold under the Elpida brand, its DRAM revenue, and market share, will continue to decline.

While its branded revenue will decline it does not appear that its DRAM production will decline. All the PC DRAM that had been branded Powerchip will now be branded Elpida, but this will not affect the overall supply of PC DRAM to the market. Furthermore, Powerchip has indicated that it will grow its output of specialized DRAM…which is quite contrary to an exit. Powerchip has been using Elpida’s DRAM technology for some time now and Elpida has been selling Elpida-branded, Powerchip-made PC DRAM for some time. Today’s announcement is but a formalization of an existing arrangement.