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."

Tablets are the New Mobile

Tablets are the new mobile, the slide deck in the article shows the growth of mobile, tablets in the Apple and Android eco-sphere. there are many other slide at the link below. The future of mobile follows the trajectory of April 15, 2009 Mobile Computing the Next Big Market.

Ron

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

Future Of Mobile [SLIDE DECK]

 

Henry Blodget and Alex Cocotas | Mar. 21, 2013, 11:37 AM

Read more: http://www.businessinsider.com/the-future-of-mobile-slide-deck-2013-3?op=1#ixzz2OHIaEnKc

To kick off the conference, our BI Intelligence team—Marcelo Ballvé, Alex Cocotas, and I—put together a deck on the current trends in mobile. We looked closely at the growth of smartphone and tablet adoption, the platform wars, and how consumers are actually using their devices.

See more 

 

Flash Memory Growth & Sales Surpass DRAM

See in August 2012 Flash Memory Sales Surpass DRAM  , and DRAM Market Plateau/ Flash NAND Growing

While the NOR market size is not growing as fast as NAND market it is still big enough to make the combined flash market bigger than DRAM market.

More on NOR market in a previous comments Flash NOR Memory Revival and in my May 2007 article on Long Term Trends in the NOR and NAND Markets

Ron


http://www.maltiel-consulting.com/




Flash overtakes DRAM
David Manners,   Thursday 20 December 2012 10:09

The flash memory market will grow 2% to $30bn in 2012, overtaking the $28bn DRAM market for the first time, says IC Insights.

With the exception of 2010, the DRAM and flash memory markets have been growing closer in size to each other for several years but demand for flash used in portable media devices, coupled with two years of weaker demand and price erosion for commodity DRAM used in personal computers, will finally be enough to push total flash sales beyond those for DRAM this year, says IC Insights.

Among portable media devices, smartphone shipments are projected to finish the year up 55% to 750 million units and shipments of tablet computers are forecast to rise 80% to 117 million units.

Through 2017, the flash memory market is expected to widen its lead over DRAM. In fact, IC Insights forecasts the NAND flash memory market alone will be larger than the DRAM market beginning in 2013.

Among more than 30 product segments classified by WSTS, NAND flash is forecast to have the third-highest average annual growth rate through 2017, trailing only the market growth rates for tablet processors and cellphone application processors.
NAND flash sales are forecast to increase 14% annually from 2012-2017, growing to $53bn at the end of the forecast period while the DRAM market is forecast to grow 9% annually over this same time.

Mobile DRAM Takes Over

"mobile DRAM commanded more than 26 percent of all DRAM revenue during the second quarter—a significant improvement from 19 percent the same time a year ago, and from 11 percent two years ago in 2010.
This is attributed to 2 reasons:
1. Share of mobile DRAM bit shipments is now at 17.8 percent, up from 7.9 percent in the first quarter.
2. The price of mobile DRAM has fallen less than that of its commodity cousin and its pricing is overall less vulnerable given the segments it plays in."(from Mobile DRAM Market Grows, Samsung Domination Continues)

Ron
www.maltiel-consulting.com



Mobile DRAM revenues up in 2nd Quarter

Thursday, October 18, 2012


Mobile DRAM revenues rose to the highest level yet in the second quarter of 2012 Revenues amounted to US$1.85 billion in the second quarter, up from US$1.83 billion in the first.

Two reasons account for mobile DRAM's rising market clout. First, mobile DRAM's share of total DRAM bit shipments is now at 17.8%, up from 7.9% in the first quarter.

Second, the price of mobile DRAM has fallen less than that of itsd cousin, commodity DRAM, IHS noted. While commodity DRAM historically has been subject to great swings in pricing—with the product losing as much as half of its value from the second to the fourth quarter last year alone—mobile DRAM pricing is less vulnerable, falling 10% per quarter on average.

Mobile DRAM also tends to be priced according to manufacturing cost, not based on the general balance between supply and demand. As a result, DRAM companies are able to earn a more reasonable margin for their mobile memory products—unlike in commodity DRAM, where negative margins are frequently the rule.

Samsung Electronics continued its unshakable hold at the top of the mobile DRAM market in the second quarter of 2012, with sales of US$1.1 billion, or a remarkable 61% of the global mobile DRAM market.

With the success of smartphones such as the Galaxy S3, the South Korean electronics titan also is now one of the world's largest consumers of mobile DRAM. Samsung enjoyed a 3% improvement in sales during the quarter, and its year-to-year growth was even more impressive at 35%.

SK Hynix was No. 2 behind Samsung with sales of US$362 million, down from US$366 million in the first quarter and from US$377 million the same time a year ago.

Elpida Memory snagged a 13% share based on mobile DRAM revenues of US$245 million in the second quarter of 2012, while Micron Technology saw its share amount to 4% in light of US$79 million in revenues.
By: DocMemory

Lenovo Prove: Outsourcing is Not the Only Way (Updated)

The article below discusses Lenovo, the world's No. 2 personal-computer maker's entry into PC manufacturing in North Carolina next year.

Lenovo is not outsourcing its manufacturing as is done by other vendors (see July article Lenovo Prove: Outsourcing is Not the Only Way)




The July article discusses how Lenovo has been successful manufacturing in house. It is a good way to avoid the commodity PC price squeeze.

Lenovo Chief Technology Officer says the strategy is playing a key role in the development of new products. "If you look at the industry trends, most innovations for" PCs, smartphones, tablets and smart TVs are "related to innovation of key components—display, battery and storage," he said. "Differentiation of key parts is so important. So we started investing more…and working very closely with key parts suppliers" for things like bigger and thinner touch screens."


Ron

http://www.maltiel-consulting.com/









Lenovo to Set Up PC Plant in U.S.
By JURO OSAWA   October 2, 2012, 12:57 a.m. ET

Chinese computer-maker Lenovo Group Ltd. will start manufacturing PCs in North Carolina next year. Company executives said the effort, starting with only a few million dollars and just over 100 workers, will be the beginning of something bigger, rather than a one-time made-in-America publicity effort.

The world's No. 2 personal-computer maker says the PC production line now being built at a facility in Whitsett, N.C., will allow the company to become more responsive to U.S. corporate clients' demand for flexible supplies and product customization. Although the cost of U.S. production will be higher compared with overseas production, an added benefit will be to raise Lenovo's profile in the U.S., where it ranks fourth in market share by shipment.

"Us having a [production] facility here in a home country is a differentiator that people will value," said Lenovo North America President David Schmoock. He said the incentive for the move is similar to companies taking steps to become more environmentally sustainable. "Being green is not necessarily the lowest-cost option for a lot of companies, but you do it because your customers and partners value you being green."

While the investment is tiny for Lenovo, whose revenue was nearly $30 billion in the most recent fiscal year, it is a symbolic move for the company that rose to international prominence when it bought the PC business of International Business Machines Corp. in 2005. And with its new production line in North Carolina, Lenovo will stand apart from its U.S. rivals—No. 1 PC maker Hewlett-Packard Co., HPQ -3.09%Dell Inc. DELL +0.58%and Apple Inc. AAPL +0.32%—which no longer make personal computers in the U.S.

Lenovo executives said the new production line isn't a temporary publicity stunt. "I believe this is the first of many steps to increase our production capability," Mr. Schmoock said. "I'm very, very bullish about what I can get out of this facility."

Gerry Smith, Lenovo's head of global supply chain, said the decision to set up a production site in the U.S. is in line with the company's broader strategy of localizing its production in major markets as much as possible.

"Now we are big enough in the U.S. to justify this move," he said.

The move also comes as political rhetoric against Chinese companies heats up in the U.S. Last week, President Barack Obama prevented a company owned by two Chinese nationals from acquiring four wind-farm projects in Oregon, saying that those sites are all within or near restricted airspace. Mitt Romney, Mr. Obama's Republican rival in November's presidential election, also has taken a harsh tone against China.

Critics of China have focused on national security, industrial spying and job losses. Chinese telecommunications suppliers Huawei Technologies Co. and ZTE Corp. 000063.SZ +5.48%are being investigated by the U.S. House of Representatives Intelligence Committee over whether their gear could be used to spy on the U.S.

Mr. Schmoock said the decision to introduce a production line in the U.S. isn't a response to the political climate. Lenovo's customers already know that Lenovo is a "truly global" company, he said. "I don't think there's any negative perception we have to overcome."

Lenovo manufactures close to half of the computers it sells, far more than its U.S. rivals. Currently, the PCs that Lenovo sells in the U.S. are produced at the company's Mexican or Chinese factories.

Despite owning the well-regarded ThinkPad brand and having a solid presence in the U.S. market for PCs used in offices and schools, Lenovo has yet to become a major brand for general consumers in the U.S. Its global market share in PCs is about 15% but its U.S. market share is 8%, running fourth behind Hewlett-Packard, Dell and Apple, according to research firm IDC.

The new production line will be located near the company's U.S. headquarters outside of Raleigh, N.C. Unemployment in the area has remained stubbornly high, with the jobless rate in the county at 10% compared with the national rate of 8.1%. The factory isn't far from the site of the last Dell PC factory in the U.S., which closed in 2010.
—Ben Worthen contributed to this article.

DRAM Market Plateau/ Flash NAND Growing

While the PC market is slowing as the article below discusses, the Tablet and iPad are new markets that should offer growth opportunities for both Flash NAND and DRAM.

The key reason that DRAM is slowing while NAND (and NOR) are growing faster is due to the inherent advantages of Flash vs. DRAM.






We can already see that Flash Memory Sales Surpass DRAM  additional reasons were mentioned in the March 2012 article When will Flash Memory Market be 2x of DRAMs


Ron
http://www.maltiel-consulting.com/







DRAM Makers Continue to Suffer as DRAM Price Falls

http://www.xbitlabs.com/news/memory/display/20121032152632_DRAM_Makers_Continue_to_Suffer_as_DRAM_Price_Falls.html
4GB DDR3 DRAM Module's Price Drops to $16.25

by Anton Shilov 10/01/2012 

Dynamic random access memory (DRAM) market monitoring company DRAMeXchange claims that as notebook shipments show signs of weakening and Windows 8 looks unlikely to stimulate PC shipments, second-half September contract price continues on a downtrend.

Average transaction price per 4GB DDR module fell from $17.25 to 16.25, with a low of $16, close to the lowest price reached during the second half of 2011. Average 2GB module price, on the other hand, has dropped to $9.25, a 5.13% decrease compared to the first half of the month. As 4GB modules have replaced 2GB modules as the market mainstream, 4GB price drops have become more apparent.

At press time, one untested [eTT] 2Gb DDR3 chip price cost $0.683 on average in Taiwan's spot market, 2Gb DDR3 1333MHz/1600MHz chip's price was approximately $0.844, whereas 4Gb DDR3 1600MHz memory IC was priced at $2.545 on average on the spot market.

From the market perspective, DRAM average selling price has been plummeting at an increasing rate since July, reflecting not only weaker-than-expected seasonal demand, but also the fact that supply-side adjustments were not as effective as hoped. Using 4GB module price as the basis of calculation, 2Gb chip price has plunged to a low of $0.84, arriving at spot price levels. Looking at the spot market, as purchasing is weak, module makers are less eager to restock inventory. Both contract and spot prices reflect price negotiation difficulties, and transaction volume has been much lower than last quarter, clear indication that both module makers and PC OEMs have high stock levels; thus, buying momentum is not likely to pick up in the short term. In the absence of large-scale production cuts, TrendForce expects contract price will remain on a downtrend.

As the PC market has matured in recent years, in addition to the fact that the global economy is expected to worsen in the second half of this year, TrendForce forecasts PC shipments will see -3.9% growth for 2012. Furthermore, as consumers’ limited budgets and changing preferences steer them towards other mobile devices, smartphones and tablets are experiencing high growth while the PC market suffers. It is clear that PC demand is not as it was; the category is no longer the market mainstream, as shown by the fact that the 2012 PC DRAM shipment ratio has fallen below 50% for the first time.

On side, although makers are beginning to favor non-commodity DRAM production, PC DRAM supply is still in excess, which indicates restoring the supply-demand balance can no longer be achieved via production adjustments. A portion of commodity DRAM capacity must be permanently reduced if industry supply levels are to be lowered. According to TrendForce data, 2HSept. 4GB module price is approaching last year’s low, and is already below every DRAM maker’s total cost (based on mainstream 30nm process). Losses from commodity DRAM are not decreasing, and price is expected to continue falling in the short term unless large-scale capacity cuts are initiated.