SK Hynix Loses in NAND Flash, but will Regain its Form

According to DRAMeXchange, an e-commerce site dedicated to semiconductors and memory chips, on February 16 SK Hynix’s share of the world NAND flash market in 4Q of 2013 fell to 11.8 percent, down 1.9 percent from the 3Q.

SK Hynix fell from third to fourth place. Gross revenue was US$730.5 million, a 17.3 percent loss from the 3Q of 2013. The loss stems from the fire at SK Hynix’s D-RAM fab in Wuxi, China in 2013, which led to the temporary redesign of a local NAND flash production fab.  SK Hynix has been operating parts of the local fab for D-RAM instead of NAND flash, to maintain production of DRAM products. 

The lackluster performance of SK Hynix was a boon for its chief rival, Micron.  During 4Q 2013, Micron moved into 3rd place with a 15.5 percent share of the market, gaining 2 percent from 3Q.  Its revenue was US$957 million, a 9.7 percent increase from 3Q.   

Industry watchers see this as a hiccup, an aberration resulting from temporary production withdrawal.  They argue that SK Hynix can get its numbers back on track once normal production resumes.  Moreover, SK Hynix is predicting that the shipment of NAND flash is expected to increase in 1Q of 2014.  

Kim Jun-ho, president of SK Hynix Corporate Center, said, “Production of NAND flash will resume its previous volume before the fire incident.”  Then he gave his prediction, “The growth will be in single digits.”

Stock market analysts also said that SK Hynix’s production of the NAND flash business will increase starting in 1Q 2014.  Roh Geun-chang, researcher at HMC Investment Securities, said, “The volume that was lost due to the conversion of manufacturing has been restored, and production for January has regained its normal volume, which is 160,000 units a month.”  He also pointed out, “Total bit growth, or the volume of production growth measured by bits, will increase to 6.4 percent.”

Samsung Electronics continued to be the flag carrier for Korea’s NAND flash, retaining the top market share with revenue of US$457.9 million, or 39.8 percent of the market, up 2.4 percent from the same period of 2012.  With strong performance by Samsung Electronics, the NAND flash market share by Korean manufacturers increased to 51.6 percent in 4Q, up 0.5 percent from 3Q in 2013.