Hynix rises to second place in DRAM market

Samsung held onto its title as the world's largest producer of DRAM memory chips in 2006 with 28 percent market share.

Samsung Electronics Co. held onto its title as the world's largest producer of DRAM (dynamic RAM) memory chips in 2006 despite a late charge by Hynix Semiconductor, according to a study released Thursday.

Hynix leapfrogged Qimonda, jumping into second place by posting a 31 percent increase in DRAM bit shipments from the third to fourth quarter, while the market as a whole grew by only 14 percent in that time, according to iSuppli Corp.

In 2006, Samsung claimed DRAM revenues of US$9.5 billion, 28 percent of the entire US$33.9 billion market, iSuppli said. Hynix followed with 16.6 percent market share, leading Qimonda's 15.9 percent, Micron's 11 percent and Elpida's 10.4 percent. All other producers were in single digits.

Hardware vendors use DRAM semiconductor memory in a vast range of products, including PCs, printers, hard disk drives, mobile phones, digital cameras, televisions and game consoles. Although demand will keep growing, iSuppli says slumping prices in 2007 will take the wind out of those sails, pushing revenue down despite rising sales.

The vendors are more optimistic. Qimonda predicts that demand could rise in 2007 because of Microsoft's launch of its new Windows Vista OS, as well as other communication and consumer applications, according to the company's Jan. 23 earnings report. Likewise, Samsung predicts that a strong consumer electronics market will push demand for DRAM used in 2.5G and 3G (third-generation) handsets and in game consoles.

DRAM vendors also hope to continue momentum by relying on technology advances, planning to shrink their chip architecture from 90 nanometers to 80nm and below in the short term, and to upgrade from current DDR2 design to DDR3 in coming years.

Despite its dominant position, Samsung suffered in December as one of its executives agreed to serve jail time and pay a large fine as the result of an investigation by the U.S. Department of Justice into price-fixing practices in the industry. The plea was the fifth from a Samsung executive, and marked the 18th person from four vendors indicted since December 2003. The other companies charged were Hynix, Elpida and Infineon (which has since spun off its DRAM division as Qimonda).

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Ben Ames

IDG News Service

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