Plan B Enforced
According to market researcher IHS Markit, SK Hynix recorded a market share of 26.8% in the DRAM market in the second quarter of this year following Samsung Electronics (45.1%). However, in the NAND market, its share sank to 10.6% from 11.4% in the previous quarter.
Micron overtook SK Hynix in one quarter since the latter jumped to fourth place by relegating Micron. Samsung and WD, which ranked first and second, respectively, accounted for 38.3% and 15.8% of the market, respectively.
SK Hynix is also considering a plan to move up the completion of the Wuxi plant in China and Cheongju factory in Korea, which is scheduled in the first half of 2019, to the fourth quarter of 2018 as it failed in taking over the Toshiba’s semiconductor business. If the company succeeds in shortening the time for mass-production, it will be able to achieve a competitive advantage in the NAND sector.
The 2-story M14 NAND flash factory which began mass production in May this year is capable of rolling out 100,000 300mm wafers (silicon substrates) per month.
The factory is currently in operation with 50% of facilities. SK Hynix expects that the factory will contribute to actual bit growth (growth of semiconductor production calculated by converting memory volume in the bit unit).
Western Digital which succeeded in turning the tide at the eleventh hour will be able to take an edge over SK Hynix and Micron in the NAND market. But Western Digital will not have a big impact on market dominance as the company will acquire Toshiba's memory business without voting rights. Elpida of Japan and Micron of the US, both of which competed with each other as the third and fourth rankers in the global DRAM industry were merged in 2013 but the merged firm’s market share was lower than their combined market share before their marriage. So there is little chance that Western Digital and Micron will merge with each other.
Fortunately, it is said that even if WD completes its acquisition of Toshiba, Toshiba unable to use enough cash, and WD, which invested a huge amount of cash in taking over SanDisk and Toshiba for one year and a half, will not have enough funds for new investment.
"SK Hynix's attempt to acquire Toshiba's semiconductor business was aimed at raising a possibility of collaboration," an industry representative said. “Even if SK Hynix had succeeded in acquiring Toshiba, there would have been some limit to the synergy effect of the acquisition because they will not form a single body.