Sunday, October 20, 2019
Global DRAM Market Remaining in the Doldrums
Shrinking Chip Market
Global DRAM Market Remaining in the Doldrums
  • By Cho Jin-young
  • February 2, 2016, 06:45
Share articles

Samsung Electronics and SK Hynix are estimated to have reduced their supply volume by 10% to 20% in 2015.
Samsung Electronics and SK Hynix are estimated to have reduced their supply volume by 10% to 20% in 2015.

 

The global DRAM market is showing no signs of recovery at all although major players in the industry such as Samsung Electronics and SK Hynix have reduced their supply since late last year.

According to the World Semiconductor Trade Statistics (WSTS), the global DRAM market sales decreased 33% from a year ago and 26% compared to the previous month in December last year. Under the circumstances, the entire semiconductor market shrunk by 9% from a year earlier.

In general, component shipments and sales tend to show slight decreases in December in the industry. However, such a rapid decline in sales was for the first time in seven years. The number of major DRAM suppliers has decreased to three but the supply is still overwhelming the market demand, causing many people to doubt the sustainability of the industry.

Samsung Electronics and SK Hynix, which account for 73.5% of the global DRAM market, are estimated to have reduced their supply volume by 10% to 20% in 2015. “Micron Technology is currently increasing its supply volume by starting 20nm process-based DRAM manufacturing,” said an industry insider, adding, “This has much to do with the supply volume adjustment by Samsung Electronics and SK Hynix.”

In January this year, the average prices of DRAMs for PCs and servers fell 6% to 7% and 8% to 10%, respectively. The problem is that the inventories of Samsung Electronics and SK Hynix are increasing at a rapid pace along with those of finished product suppliers and distribution channels due to sluggish demands.

There is a bumpy road ahead for the two companies’ new memory semiconductor businesses, too. They are trying to open up new markets by increasing their investments in high bandwidth memory, universal flash storage and the like, but their expenses such as patent fees and development costs are exceeding their previous estimates.