Tag: hynix

Tech firms not worried about war with North Korea

Global electronics firms are not particularly concerned if Donald (Prince of Orange) Trump declares war on North Korea.

There is some concern among the Tame Apple Press that Apple will not be able to source key parts from South Korea if a war starts. Never mind the huge body count that is expected – just so long as Apple fanboys get their toys.

Trump told Reuters that a major conflict with North Korea is possible in the standoff over its nuclear and missile programmes, though he would prefer a diplomatic resolution. But then he might have changed his mind by the time he popped around the corridor.

South Korea, a US ally and home to major electronics parts makers such as Samsung Electronics, LG Display and SK Hynix, would be particularly vulnerable to any military attack from its northern neighbour.

South Korea supplies more than half of components such as memory chips and flat screens.

However, investors are pouring money into South Korea’s financial market, and companies are flocking to the stock market to raise billions of dollars.

Seoul’s stock market has climbed nine percent so far this year to near record highs, helped by strong earnings by major exporters including Samsung Electronics, which rose three percent to a life-time high on Friday after reporting its highest profit in more than three years.

Earlier this week, Hynix and LG Display, both Apple suppliers, reported record quarterly profits and sounded upbeat for the remainder of the year.

LG said that talk of conflict is speculative, and it did not have any plans to react to the current situation.

Hyundai Motor, the country’s top automaker, said it had detailed contingency plans to ensure business carried on under various situations but couldn’t disclose them.

Any military conflict on the Korean peninsula could have a dramatic effect on the memory chip market in particular, as Samsung’s and Hynix’s main operations are clustered in South Korea.

The pair control half of the flash memory market, and almost two thirds of DRAM chips, widely used in computers, making it almost impossible for customers to find alternative supplies quickly.

As supply of those chips are already tight, any interruptions to their manufacturing operations might cause large customers such as Apple and Lenovo to trigger a contractual term known as an “allocation” to get more of their suppliers’ limited supply, according to industry executives.

The ultimate beneficiaries of supply interruptions in South Korea would likely be Japan’s Toshiba, and US  firms Micron Technology and Western Digital.

Micron snaps up rest of Inotera

Samsung DRAMUS memory maker Micron has bought the rest of Inotera, strengthening its position in the DRAM market.

Micron already owned a third of Inotera and it will pay $3.2 billion to buy a majority share.

The situation is a little complicated, according to Taiwanese wire Digitimes, because Formosa Group, which owns its own memory company Nanya, has 32 percent of the shares of Inotera.

But it’s understood that Formosa will vote in favour of the acquisition. At the same time, Micron said it has made a contract to give Nanya an option to license its new technology.

Micron already has a deal with Nanya to license its 20 nanometre technology.

All in all, this gives Micron a far stronger position in a market largely dominated by South Korean giants Samsung and Hynix. Earlier this year, Tsinghua – a mainland China state-backed comglomerate, made a failed bid to buy Micron..

Rambus to sell its own chips

Rambus HQRambus, which develops chip technology that it then licenses to others to manufacture, is to start selling chips under its own name.

The memory chips are aimed at enterprises and will be called the RB26. It’s already started sampling the chips to customers. Rambus said in a statement that the RB26 is a memory module chipset for data intensive applications including real time analytics.

Rambus has a long record of legal action against other chip manufacturers for allegedly breaching its intellectual property designs.

Nvidia, Micron, Hynix and others have all experienced the joy of being sued by Rambus and for some time its entire business model appeared to come from royalties it had won through the courts.

It started in 1990 as a company that designed chips which it then licensed, a little like successful British company ARM. The difference between the two is that ARM doesn’t have a taste for litigation.

It’s not clear which foundry will manufacture the Rambus chips, but they’re expected to be available later this year.

Rambus will show off its server memory chipset at this week’s Intel Developer Forum.

Mobile memory market resists price declines

Apple iPad AirWe reported last week that DRAM for PC desktops is under clear pressure, with continuing price drops expected until the end of this year and beyond.

But the same isn’t true of mobile memory, according to market research company Trendforce.

Analysts said that this segment saw 7.7 percent growth in the second quarter, compared to the first quarter of this year, amounting to shipments worth $3.851 billion. And that won’t be the end of it because prices are expected to continue rising.

The introduction of the next generation of mobile memory, LPDDR4 has caused average selling prices to rise.

The clear leader in shipments for mobile DRAM is Samsung, which has installed the latest memory types into its premier smartphones, the Galaxy S6 and the S6 Edge.

Samsung also managed to reduce its dependency on DRAM for PCs and that now only accounts for 20 percent of its shipments.

Trendforce believes that PC memory will fall by as much as 30 percent during the third quarter, and is relying on Apple using the latest mobile memory to keep its profit margin high.

Samsung had a 57.6 share of the market during the second quarter, way ahead of SK Hynix (23.9%), Micron (16.5%), Nanya (1.2%) and Winbond (0.7%).

Putting this into geographical terms, Korea held 81.5 percent of this sector, America – that is to say Micron 16.5 percent, while the Taiwanese vendors only held two percent market share during the period.

Chinese make bid for Micron

ChinaChina’s state-backed Tsinghua is trying to buy US memory chip maker Micron Technology in a a $23 billion bid.

The deal will be the biggest Chinese takeover of a US  company and is guaranteed to upset the US government which  is worried about technology ending up in Chinese hands.

The bid is expected to be made by tomorrow, and so far Micron knows little about it.

If it does manage to get its paws on Micron, Tsinghua would be a key champion for China’s technological development. It has already struck deals and research partnerships with international firms in the semiconductor industry.

The company is controlled by Tsinghua University in Beijing, which counts President Xi Jinping among its alumni, and is backed by China’s central government.

China has attached strategic importance to the development of domestic semiconductor, server and networking equipment industries amid fears of cyber-spying by the Americans.

Micron is the last major US based manufacturer of DRAM chips used in personal computers. This means that it will have to pass a review by the Committee on Foreign Investment in the United States, which reviews such deals for national security implications. There aren’t any really, but the US is paranoid about these things.

Micron makes both dynamic random access memory chips, or DRAM, and NAND memory chips for storing music, pictures and other data on smartphones, cameras and other mobile devices. It has a partnership with chip behemoth Intel.

None of the world’s top memory chip manufacturers are based in China, although South Korea’s Hynix has a plant in Wuxi and Samsung, the global market leader, also from South Korea, last year began full-scale production at a new NAND chip factory in Xi’an.

Micron has manufacturing plants and a sales office in Taiwan, and indirectly holds a 20 percent stake in Inotera Memories, a joint venture with Nanya Technology. If Micron became a Chinese-owned company, Taiwanese rules would require it to re-submit its investment application for review.

A Micron deal could also face scrutiny from China’s National Development and Reform Commission, which must approve outbound investments worth more than $2 billion or those in sensitive industries. However this is likely to be rubber stamped.

 

DRAM revenues slumped in first quarter

SamsungSales of dynamic random access memory (DRAM) fell by 7.5 percent in the first quarter of this year.

Revenues came to $12 billion and the reason was weak contract prices plus poor sales of notebooks and smartphones because of the time of year.

According to market research company Trendforce, even though there was a decline in revenues in the first quarter, manufacturers managed to keep their margins to the same level compared to the last calendar quarter of 2014.

That’s because new processes attract higher prices, and manufacturers took advantage of the trend.

The whole DRAM market worldwide is slated to be worth $51.2 billiob for the whole of this year, and that will represent an increase of 12 percent, compared to 2014.

Korean manufacturers Samsung and SK Hynix took the lion share of the market in the first quarter, with a 43 percent and 27 percent share respectively. Micron, the only US manufacturer, had a share of 22.5 percent.

Trendforce said that Samsung is the industry leader, making chips at 20 nanometres and it’s likely this process technology will represent 60 percent of its production during the year.

Here’s how Trendforce-DRAM Exchange saw the figures for the first quarter.

DRAM sales Q1 2015

Samsung spends $9.2 billion to increase fab capacity

SamsungSamsung Electronics has written a $9.2 billion to boost capacity at its new South Korean chip plant.

This represents a 64 percent increase over announced investment plans and is its biggest ever commitment to a single production facility.

It is being seen as a move to make semiconductors to offset slowing smartphone earnings.

The plant is scheduled to begin production in 2017 and will make DRAM memory chips and some mobile processors.

A Samsung spokeswoman said the firm has not decided on any additional investments or what products the new plant would make.

The new plant, which will be located in Pyeongtaek south of Seoul, has led to some worries about the industry’s medium-term outlook.

Samsung and SK Hynix have reported robust memory chip earnings in recent quarters, partly because careful capacity management across the industry.

Samsung has always said it will seek sustainable memory chip profit growth, suggesting that it will not initiate a price war.

But the investment does mean that it will be investing shedloads into expansion in what is likely to be DRAM.

Samsung mulls Hynix DRAM

It looks like Hynix will recover from Apple’s falling iPhone sales by selling its DRAM to Cupertino’s arch enemy, Samsung.

J.K. Shin, head of Samsung’s mobile business told Reuters that his outfit was considering purchasing mobile memory chips from rival Hynix for future products including its new flagship Galaxy S smartphone to be launched this month.

If this happens Hynix can breathe a sigh of relief, the company’s bottom line had been suffering after it had been announced that Apple was cancelling orders after the iPhone 5 did not do as well as expected.

Hynix relied heavily on Apple as a customer for its DRAM, but after the rush for Apple toys began to slow down, the company started to suffer.

Prices of mobile DRAM chips have increased steadily since early this year as the supply has started to be tightened.

What is odd about this is that Samsung makes its own DRAM chips and depended on internal supplies of memory chips for its Galaxy range of smartphones.

It seems that it has started looking to outside chip suppliers to ensure no supply disruptions for key models of its Galaxy S smartphone.

The Galaxy S4, which will go on sale later this month, is expected to outsell its predecessors, with monthly sales of about 10 million. 

Korean chipmakers dominate DRAM market

Korean DRAM manufacturers have a virtual stranglehold on the industry and as of Q4 2012 they control 80 percent of the market.

DRAM sales have recovered thanks to strong demand for smartphones, growing 21.4 percent sequentially in the last quarter of 2012. Samsung and SK Hynix saw their quarterly revenue shoot up by 26.9 and 36.5 percent respectively. The two companies currently account for around 78.5 percent of the market. What’s more, they are doing even better in the mobile DRAM industry, which is set to grow further.

Elpida ranked third with 11.3 percent growth, thanks to large shipments from Apple. Due to Qualcomm’s decision to use Package on Package memory, Elpida is likely to play a significant role in the high end smartphone market. Qualcomm’s Snapdragon 600 is out and the 800 is coming in a few months. Both chips are expected to do very well in the high end, boosting the outlook for Elpida.

Micron is focusing its efforts on storage in mid to low end smartphones, so it is losing ground in the DRAM market. It currently accounts for just 1.3 percent of the market.

Taiwanese players are trying to increase their share in the mobile DRAM market and cash in on the smartphone boom, but so far their efforts have not been very successful, Evertiq reports.

According to a recent ICS insights report, the market for tablet MPUs is forecast to grow 50 percent this year, quicker than any other semicon segment. The same goes for smartphone processors, and, of course, DRAM.

The market for DRAM chips is forecast to grow about nine percent this year, mainly thanks to higher prices. IHS iSuppli is even more upbeat and it reckons DRAM shipments will increase 30 percent this year. 

Mobile DRAM is becoming an increasingly important market segment and it currently accounts for more than a quarter of DRAM revenue. Furthermore, mobile DRAM prices tend to be more stable than those of PC DRAM, which is good news for manufacturers. 

Rambus is in hot water

It looks like chipmaker turned patent troll Rambus is in hot water with the courts.

A US Judge has ruled that the company destroyed records that could have been evidence in its patent dispute with South Korea’s Hynix Semiconductor.

The court has not yet decided on a penalty for the American firm, but Hynix is confident that the ruling will “substantially limit” the royalties it will be required to pay Rambus for infringing on the company’s patents.

Hynix had been on the back foot in the case since Judge Ronald Whyte of the US District Court for the Northern District of California said that Rambus’ patents should still be seen as valid.

However, Judge Whyte said that Rambus’ destruction of evidence “should preclude it from entitlement to a royalty that places Hynix at a competitive disadvantage”.

Both companies have been told to come up with a figure of what they believe would be a reasonable royalty rate for the patents.

Rambus General Counsel Thomas Lavelle told Reuters  that this was a positive result as it is consistent with what it had been seeking “reasonable compensation for the use of our patented inventions.”

Whyte had ordered Hynix to pay Rambus around $397 million for infringing on DRAM patents.