Reading time ( words)
The DRAM market did not adhere to seasonal patterns in the fourth quarter of 2014 and the off-peak season did not materialize, according to the newest report from DRAMeXchange, a division of TrendForce. The average contract price in the fourth quarter was slightly above the prior quarter despite the gradual fall of contract prices since November. Furthermore, the top-tier DRAM makers were very active in their migration to the 20/25nm processes, and the additional output resulted in an increase in quarterly revenue to $13 billion or a growth of 8.2%, setting a new highest revenue record for a single quarter.
DRAMeXchange’s Assistant Vice President, Avril Wu, stated DRAM suppliers will be able to maintain a healthy level of profitability. This is attributed to technology migration that increases output and well-balanced product ratios. Samsung has been the most profitable DRAM maker with an operating margin of 47%, while SK Hynix is close behind at 42%. Although Micron is mainly manufacturing on 30nm technology, the supplier raised their server DRAM production ratio and as a result its operating margin rose to 29.5% in the fourth quarter of 2014. DRAMeXchange expects stable profits for the industry with its overall value projected to reach $52.3 billion this year, a 13% growth compared with the prior year.
On the technology front, Samsung began volume production on the 20nm and 23nm process in the fourth quarter. At the same time, the yield rate and output of the 25nm process has continued increasing, allowing Samsung’s operating margin to become the highest in 4Q14 among the top three DRAM makers. After making significant progress in yield rate and capacity of 25nm process in the third quarter, SK Hynix’s output soared in the fourth quarter. It had the strongest quarterly performance among all DRAM makers with a 13% revenue growth compared with previous quarter.
As for Micron, bolstered by its mobile and server DRAM product lines, its fourth quarter revenue grew 9% compared with the prior quarter. Micron began trial production on the 20nm process in the fourth quarter, and it is continuing with the plan to have 80K wafer starts per month on the 20nm production by the end of 2015. This will help the US supplier keep up with the Korean rivals when it comes to profitability.
Looking at the Taiwanese memory makers, Nanya is currently focusing on specialty DRAM production but also expanding PC DRAM and mobile DRAM capacity. The supplier plans to partner with specific manufacturers in the future and move towards the 20nm process. Powerchip’s DRAM revenue in the fourth quarter had a slight decrease of 1.1% compared with the previous quarter. This is due to the depreciation of the New Taiwan dollar. With capacity expansion at the P3 fab in progress, Powerchip’s wafer starts per month for PC DRAM is expected to reach 30K pieces. The fab will focus on both foundry and DRAM productions in the future. Winbond’s fourth quarter revenue fell slightly by 4.2% compared with the previous quarter. However, the supplier benefited from the increasing ratios of mobile DRAM and automotive electronic products, hence its profits grew despite falling revenue. Winbond’s fourth quarter capacity reached 40K wafer starts per month, and it is expected to increase to around 44K in 2015.
Wu said DRAM makers made new records in revenue and profits in fourth quarter of 2014. She further noted that though DRAM prices have been falling recently due to seasonality, suppliers will be able to maintain profits as they migrate to more advanced technology and thereby reducing costs. Thus, TrendForce expects 2015 to be another profitable year for the DRAM industry.
Warning: array_rand() expects parameter 1 to be array, null given in /home/iconnect/releases/20160311/public_html/elements/next_item.php on line 41