DRAM Market Consolidation=> 32% Growth, All Time High Revenue

6+ DRAM vendors in 2001

Worldwide semiconductor revenue grew 7.9% in 2014, led by DRAM 32% increases;

"memory market was the best performer for the second year in a row, growing 16.6 percent, meaning the rest of the market only achieved 4.9 percent growth," said Andrew Norwood, research vice president at Gartner. "As a group, DRAM vendors performed best, lifted by the booming DRAM market, which saw revenue increase 32 percent to $46.1 billion, surpassing the all-time high of $41.8 billion set in 1995." (more in the article below).  

The consolidation in the number of memory manufacturers from 20+ in the early 90s to 3 vendors help to firm DRAM memory chip price. Due to the limited number of vendors and the high cost of new fabs will keep the floor under DRAM chip costs in the future.

More about fab consolidation in my blog from March 2012 – Moore's Law End? (Next semiconductors gen. cost $10 billion)

DRAM vendors market shares are at S. Korea's share in DRAM market hits all-time high in 2014

Ron
Insightful, timely, and accurate semiconductor consulting.

Semiconductor information and news at - http://www.maltiel-consulting.com/

Worldwide Semiconductor Revenue Grew 7.9 Percent in 2014, According to Final Results by Gartner

Booming DRAM Market Sees Revenue Increase 32 Percent During 2014

Worldwide semiconductor revenue totaled $340.3 billion in 2014, a 7.9 percent increase from 2013 revenue of $315.4 billion, according to final results by Gartner, Inc. The top 25 semiconductor vendors' combined revenue increased 11.7 percent, which was more than the overall industry's growth. The top 25 vendors accounted for 72.4 percent of total market revenue, up from 69.9 percent in 2013.

"2014 saw all device categories post positive growth, unlike in 2013, when application-specific integrated circuits (ASIC), discretes and microcomponents all declined. The memory market was the best performer for the second year in a row, growing 16.6 percent, meaning the rest of the market only achieved 4.9 percent growth," said Andrew Norwood, research vice president at Gartner. "As a group, DRAM vendors performed best, lifted by the booming DRAM market, which saw revenue increase 32 percent to $46.1 billion, surpassing the all-time high of $41.8 billion set in 1995."

Intel saw a return to growth after two years of revenue decline, as PC production recovered, with sales up 7.7 percent (see Table 1). The company retained the No. 1 market share position for the 23rd consecutive year by capturing 15.4 percent of the market, which was down slightly on the previous year.

2014 saw significantly more merger and acquisition (M&A) activity among the major semiconductor vendors than the previous year, with some announced deals still to close in 2015. Among the most significant deals was Avago Technologies' acquisition of LSI, propelling the company into the top 25 semiconductor vendors for the first time. MStar Semiconductor was merged with MediaTek after a prolonged merger, and ON Semiconductor acquired Aptina Imaging. After adjusting for closed M&A activity, the top 25 semiconductor vendors grew at 9.1 percent.Source: Gartner (March 2015)

Additional information is provided in the Gartner report "Market Share Analysis: Semiconductors, Worldwide, 2014."

Top Semiconductor in 2014 and 2015?

The article below summarizes results of Gartner's top semiconductor vendors in 2014. It is interesting that a 26% growth was shown by Hynix, due to strength in DRAM memory chips market (which accounts for about 80% of its revenues). Also Micron had a very large growth. Micron acquisition of Elpida strengthens their DRAM position.  DRAM memory is currently about 70% of its revenue.

Intel will continue to have largest semiconductor revenues for at least several more years since it will be hard for Samsung to grow fast while Apple has been reduces its dependence on Samsung chips in the last few years for the iPhones (see October 2012 Next iPhone A7 Made by TSMC not Samsung. 

Would MediaTek (see January 2013 - Apples' Cook in China (MediaTek Impact) or SanDisk make the top 10 in 2015 ( Top Semiconductor Ranking for 2013 )?

Ron
Insightful, timely, and accurate semiconductor consulting.
Semiconductor information and news at - http://www.maltiel-consulting.com/

Boom in RAM helped chip sales grow 7.9 per cent in 2014, as Gartner lists Top 10 vendors

Summary:Intel held on to its chip industry leadership in 2014, but it faces a challenge from Samsung and, in the long run, perhaps from Qualcomm, as smartphones and tablets compete against traditional PCs.

By Jack Schofield for Jack's Blog | January 6, 2015 -- 23:41 GMT (15:41 PST)

Thanks to booming memory chip markets, worldwide semiconductor revenues grew by 7.9 percent to $339.8 billion last year, according to preliminary numbers that Gartner released today (Tuesday). The top 25 chip vendors did even better, with revenues up by 11.7 percent compared with 2013.

Things didn't go quite as well for Intel, the biggest chip manufacturer by revenues, in spite of the PC industry's mini-recovery. However, it managed to grow sales by 4.6 percent in 2014, which contrasts with the 10.1 percent decline it suffered in 2013.

According to Gartner, "Intel continued to gain market share from AMD" in laptops and desktops, and it was also "on pace to reach its goal of 40 million tablet processors in 2014, although these processors are being shipped at significantly discounted prices with incentives." Many of these chips are appearing in 7in and 8in Windows 8.1 tablets that cost less than $100/£100.

Intel held its place as the No 1 semiconductor company for the 23rd consecutive year, with 15.0 percent of the market, though it remains to be seen how much longer its lead will last. Samsung, the No 2 chip vendor, grew revenues by 15.1 percent last year, and it's currently spending $15 billion on a new fab in South Korea to expand sales. Qualcomm took third place with growth of 11.5 percent as its Snapdragon processor continued to dominate the smartphone market.

However, Gartner said: "SK Hynix and Micron Technology benefited the most from the strong memory market, with the strongest growth of the top 10 vendors". Micron Technology's sales grew by 41.0 percent and SK Hynix's by 26.1 percent. DRAM chips accounted for about 80 percent of SK Hynix's revenues and about 70 percent of Micron's, with Micron shifting more production to NAND (Flash memory) chips.

With STMicroelectronics and Renesas Electronics losing ground - both saw sales decline by around 9 percent - we could well see MediaTek in the 2015 table. If so, it will be the first Taiwanese company to make the Top 10.

Finally, for AMD fans, the company saw its chip revenues slide by more than 9 percent to $4.67 billion, and it came 15th in the table with a market share of 1.4 percent.

Gartner provides more information about the top 25 semiconductor vendors in its latest report, Market Share Analysis: Preliminary Total Semiconductor Revenue, Worldwide, 2014.

Hynix DRAM (Wuxi) Production

Hynix DRAM production was mentioned in an announcement of introduction of the 64Gb (gigabit) multi-level cell (MLC) NAND FLASH using the 16-nanometer micro fabrication process technology.
“The equipment, not directly damaged by the fire, requires a lot of work before it can be used again in the production line,” said an industry official. “It will not be as easy to normalize the Wuxi plant as originally thought.”

Fab equipment has to be meticulously cleaned before it can be put back in production. You have to make sure running the equipment would not produce particles. In addition every piece of equipment impacted by the fire need to be recalibrated.

Hynix also mentioned:

"SK Hynix raised the production capacity of the Icheon DRAM plant by 30% after the fire in the Wuxi plant in China. Early next year the company is considering making additional investments to extend the Icheon plant."

I am not clear how they can raise production 30% very quickly. They can shrink product masks set, improve production process, or buy new equipment. Each one will take several months to implement.

 

Ron

Insightful, timely, and accurate semiconductor consulting.

Semiconductor information and news at - http://www.maltiel-consulting.com/

SK Hynix concentrates investment in the microfabrication process…in a bid to chase ‘two hares’ at a time

2013/11/21 By Lee Hyeong-soo

SK Hynix (CEO Park Seong-wook) announced on November 20 that it began to produce the 64Gb (gigabit) multi-level cell (MLC) NAND FLASH using the 16-nanometer microfabrication process technology. 

It also completed the development of the 128Gb (16GB) package. It is the largest single 16-nanometer 64Gb MLC NAND FLASH chip. SK Hynix is planning to begin mass production of this product early next year. 
In general, as the microfabrication process intensifies, the interference between memory cells takes place. SK Hynix overcame the inter-cell interference during the 16-nanometer microfabrication process by applying the air gap technology, which fills the space between circuits with air, not an insulating material. 

SK Hynix is planning to convert the DRAM microfabrication process from upper 20-nanometer to lower 20-nanometer. Its strategy is to increase the global market share while raising the DRAM production capacity at the same time through the microfabrication process conversion. It is also reinforcing its product portfolio by concentrating on development of the triple-level cell (TLC) and 3D NAND FLASH. 

“We became the first in the world to commercialize the 16-nanometer microfabrication process technology, and completed the development of the 128Gb MLC product,” said Kim Jin-woong, head of the SK Hynix Flash Tech Innovation Division. “We can secure powerful competiveness in the NAND FLASH market.” 

SK Hynix seems to be concentrating on microfabrication process conversion because it intends to keep growing stably rather than impractical technology conversion. The top management, including CEO Park Seong-wook, is confident that it will not be behind Samsung Electronics as far as the microfabrication process technology is concerned. 

The recent fire in the Wuxi plant in China greatly influenced next year’s business strategy. SK Hynix believes that it is unreasonable to seek rapid changes, such as production of 3D semiconductors, when one of its global production bases, i.e. the Wuxi plant, is unstable. 

SK Hynix raised the production capacity of the Icheon DRAM plant by 30% after the fire in the Wuxi plant in China. Early next year the company is considering making additional investments to extend the Icheon plant. The Wuxi plant was expected to be normalized sometime this month, but there is a possibility of delay. 

SK Hynix is focused on recovering the production capacity while concentrating on investing in the Icheon DRAM line for the time being. If the microfabrication process conversion is successful, it will be able to achieve 7~8%ish growth next year without any additional investment in equipment. As the DRAM price skyrocketed, the fire of the Wuxi plant did not cause much financial damage, but if it does not defend the market share to a certain extent, it may boomerang in the future. DRAM also looks attractive in terms of profits. As the short supply continues, the DRAM price is continuously rising. 

“The equipment, not directly damaged by the fire, requires a lot of work before it can be used again in the production line,” said an industry official. “It will not be as easy to normalize the Wuxi plant as originally thought.” 

Lee Hyeong-soo | goldlion2@etnews.com