DRAM contract prices are dropping sharply as oversupply mounts, according to a report by research group DRAMeXchange.
DDR3 2Gb contract prices dropped by 4.5 percent to $42 from $44 in the second half of July, while DDR2 contract prices also dropped by 8.75 percent to $36.50.
Despite the drop in contract prices, DRAMeXchange found that there is no major impact on the earning performance of DRAM vendors. It found that Samsung and Hynix retain a higher than 40 percent gross margin, while Elpida manages a 35 percent gross margin.
There is a substantial oversupply of DRAM chips, mainly manufactured for the peak season in the fourth quarter of this year, but the report found that most vendors will not sell below cost to cut down the numbers.
DRAMeXchange also found that die size will be effectively shrunk in 50nm technology. It expects that 2Gb chips will become the mainstream standard for the second half of this year, with costs ranging from $1 to $1.2 in terms of 40nm technology nodes, which is 20 percent cheaper than 50nm or 50 percent cheaper than 60nm.
Most vendors are cautious about devoting capital to process migration, but Korean vendors are still pursuing aggressive migration moves, with Samsung already launching 56nm and 46nm chips. 35nm processes should be out in the last quarter of 2010 and will account for between 5 and 10 percent of total output.
Elpida is expected to skip the 50nm process and launch 45nm in the third quarter of this year, while Rexchip will migrate fully to 45nm technology in the first quarter of 2011, which will see a flood of new DRAM chips from multiple manufacturers.
Korean DRAM maker Hynix has said that it has started production on 64 gigabit NAND flash chips using a 20nm processing technology in an effort to keep it in the game with the other slightly bigger dogs.
It’s the third time that Hynix has tried to get going with its 20nm class 64GB chip after it had been developed February last year but it’s finally got the production lines rolling at its 300mm Fab. Hynix reckons that the introduction of 20nm to its 64GB chip, double that of its standard 32GB line, will give it an edge in the mobile space or anywhere where tiny chips are needed – think smartphones and tablet PCs.
Park Hyun of Hynix says he wants output of the chips to reach 80,000 units by the end of the year. A spokesman told the Korea Herald: “We plan to raise the portion of our 20-nm class NAND flash products to 10 percent of our total NAND flash output by the end of this year, while increasing the portion of 20nm, 30nm products to mid-60 percent from the current 30 percent.
The Korean media is saying it’s about ruddy time: the gap between Hynix and larger rivals widened as other chip makers already have their 20nm NAND chips on the go, such as Samsung.
Hynix is keen to get its 20nm NAND out in the fray. It has also announced that it has joint forces with Isareli NAND provider Anobit to use its controller devices on Hynix’s 20nm and 30nm class chips.
Gigabyte has been busy overclocking the heck out of the GeForce GTX 460 series, implementing its Windforce-cooling tech on a couple of new cards.
It claims that the GV-N460OC-1GI and GV-N460OC-768I run “extraordinary” gaming performance with GDDR5 high speed graphic memory included. Gigabyte boldly boasts that its overclocked cards can “easily beat all the competitors and surpass the performance of upper-end products.”
Ultra Durable VGA components and the new Gigabyte Windforce keep the card stable while offering high performance.
The anti-turbulence cooling Windforce 2X has a dual fan design which promises to minimise turbelence between them, as well as advanced heat dissipation of hot areas found underneath the fans. It also manages to enlarge air channels on the graphics card’s vents to create an effective air flow system in the chassis.
The products, which feature Gigabyte’s Ultra Durable VGA Technology, means that you can overclock to your heart’s content without worrying too much about high GPU temperatures, as well as offering a decent bit of power efficiency with the 2 oz PCB board.
The memory is by Samsung and Hynix. Gigabyte reckons with all this in tow you’re going to have a lot of fun with gaming.
They’re available now from Gigabyte’s VGA website here
The Taiwanese government is still prepared to plunge unknown millions of dollars into a company set up when the semiconductor industry was in the dolDRAMs.
The Taipei Times said that it will still fund the Taiwan Memory Company (TMC), despite the fact that DRAM companies are moving into the black again.
Although the government is not going to divvy up the $NT8 billion that was requested, a civil servant from the Ministry of Economic Affairs told a reporter from the Taipei Times that TMC will get 40 percent of the capital it wants.
It seems that the government has changed the goal posts, because now it is rattling on about how TMC has a brand new NAND tech out towards the end of the year.
The move will cause disquiet from non-Taiwanese DRAM and NAND makers who are likely to remember how South Korean memory firms were baled out by their government several years ago.
Taiwanese partners in TMC include Photonics Semi, ProMOS and Elite Semi. If the scheme does go ahead now – and there seems to be every likelihood that it will – we wouldn’t be surprised if complaints to US trade quango the ITC are forthcoming. The Taipei Times is here.
Meanwhile, Digitimes claims TMC has struck an agreement with US company Nanostar for NAND licences. We sense a typhoon brewing here.
Six top DRAM computer memory manufacturers are going to write a $173 million cheque to make the US 33 attorneys general go away with their anti-trust claims.
The settlement resolves a 2006 lawsuit filed by 33 attorneys general who claimed that consumers and state agencies that bought electronics containing DRAM paid higher prices from 1998 to 2002 due to price-fixing.
The six companies named and shamed are Elpida, Hynix, Infineon, Micron, Mosel Vitelic, and NEC.
Apparently the DRAM manufacturer cut production in order to artificially raise prices, the Washington State Attorney General’s Office claimed.
Several companies and executives pleaded guilty to criminal price-fixing actions brought by the US Department of Justice.
Under the deal the defendants in the states’ case have tentatively agreed to pay $173 million to the 33 states and private plaintiffs, and refrain from illegal price-fixing.
Already the the companies agreed to pay nearly $326 million to computer manufacturers that purchased DRAM directly. The European Commission also reached settlements with some of the companies resulting in $410 million in fines.
In 2007, Samsung settled its case with Washington and other states for $90 million.
It is not over yet. Some outfits claimed that they didn’t do it, they were never there at the time, and it was broken when they got there. Those cases are still pending.
Despite keeping its position as top worldwide supplier of NAND flash memory in the first quarter of this year, Korean giant Samsung saw its market share slip.
That’s according to market research company iSuppli, which notes in a report that Toshiba has gained share at it and other players’ expense.
Revenues for NAND flash globally amounted to $4.36 billion in the first calendar quarter, a small increase over revenues in Q4 2009. But the first quarter is a seasonally slow period anyway.
There’s strong demand for electronics and that coupled with economic recovery, means that a “sense of normalcy” has returned for NAND suppliers, said Michael Yang, a senior analyst at the company.
“While demand for traditional NAND strongholds like flash cards and USB drives started to decline toward the end of the quarter, sales are growing at an outsized rate for consumer electronics products and smart phones. The early success of Apple’s iPad also portends strong growth for NAND demand in tablets,” Yang said.
Toshiba and Micron gained market share during the quarter, partly because they shifted to three bit per cell and the latest geometries. The figures below show percentage of revenues in US dollars for the top seven.
Q4 09 share
Q1 10 share
Auction site Ebay states it had a revenue of $2.2 billion in the first quarter, up 9 percent from $2.02 billion in the same quarter last year. Net income grew by $41 million, or 11 percent, from $357 million in 2009 to §398 million in 2010. Ebay’s payment unit Paypal reported net total pay volume worth $21.3 billion, a growth of 35 percent year over year.
For the second quarter, Ebay expects revenue to be between $2.15 billion and $2.2 billion. Revenue for the entire year is estimated to be in the range of $8.8 billion to $9.1 billion.
Sandisk says its revenue in the first quarter increased 65 percent, from $659.48 million last year to $1.09 billion. Net profit was $234.7 million, compared to a loss of $208 million one year ago. However, Sandisk said revenue was 12 percent weaker than in its preceding fourth quarter. Sandisk claims its OEM business managed to offset traditionally weak consumer demand in its first quarter. Sales for mobile products doubled, another positive effect for the maker of flash memory cards.
DRAM maker Hynix Semiconductor had its best quarter since the last quarter of 2006. Revenues amounted to 2.82 trillion Korean won (~$2.54 billion). Net income was 822 billion Korean won, after a nett loss of 1.18 trillion won last year. Hynix is on the path of recovery and profiting from increasing demand for memory products.
VMWare also posted higher revenues. Revenues expanded from $470.3 million in 2009 to $633.5 million this year. Net income grew from $69.93 million to $78.42 million.
“We expect second quarter license revenues to be down sequentially, but total revenues to increase to a range of $635 and $665 million incorporating increased revenues from the acquisition of Zimbra and assets acquired from EMC. We also expect annual 2010 revenues to be in the range of $2.625 and $2.725 billion, an increase of 30% to 35% from 2009,” commented VMWare CFO Mark Peek.
South Korean newspapers are full of reports of a press conference hosted on Monday by Kwon Oh-Chul, the new CEO of DRAM-maker Hynix.
The Korea Times quoted Kwon Oh-Chul as saying Hynix was only able to meet 60% of chip demand from the company’s clients. Hynixs’ new boss also added that Hynix is set to profit financially from the current, stronger market. The company also plans to lower its debt in the long-term from around 7 trillion Korean won (6,16 billion US dollars) to under 4 trillion won (3.52 billion US dollars).
Strong demand from customers and the hope Hynix will score record sales this year also seem to outweigh concern that the industry is facing a bubble. TSMC’s chairman Morris Chang recently warned business will look bleak in the second half of this year and sales will fall. Chang nonetheless expects the chip industry to grow somewhere between 4% and 5% in the next four years.
Kwon added Hynix would probably end all cooperation with flash maker Numonyx as soon as rival Micron Technology acquires the company. Hynix and Numonyx run a joint venture in China. Hynix will have to look for other ways to bring its flash memory business back on track, making the company more attractive as a whole to potential buyers.
Market research company iSuppli provided a listing of the top semiconductor companies in the world – and while it was a bleak year for many in the industry, there were clear winners and losers.
But as the market recovered, according to iSuppli, Intel and AMD managed to limit declines by four percent and 4.6 percent respectively.
Only two segments escaped the downturn during 2009 – manufacturers of NAND flash and manufacturers of LEDs. LEDs had a good year as vendors of TFT-LCD monitors and TVs turned their attention to backlighting using the technology. LED maker Seoul Semi saw revenues jump by 90 percent, said iSuppli.
And Asian companies like Samsung and Hynix also saw growth in 2009, due to the demand for NAND flash. Taiwanese suppliers also managed to buck the trend – MediaTek, Nanya and Macronix had growth figures of 22.6 percent, 21.2 percent and 14.4 percent, compared to 2008.
Dale Ford, senior VP of market intelligence services for iSuppli, described the year as “dismal” for the semi industry. “Suppliers based in Asia Pacific managed to eke out some growth in 2009 as they focused on hot semiconductor products and capitalised on strong demand from the region.
Asia-Pacific only declined by 5.3 percent in 2009, with Japan suffering a 20.7 percent drop, EMEA 20.5 percent, and the Americas 10.5 percent.
Here are iSuppli’s figures for the top 10 rankings worldwide. Revenues are in millions of dollars US.
The price of DRAM continues to climb with DDR3 memories up by two percent to three percent in the contract market.
DRAM Exchange, the memory watching company, said that the price of 2GB of DDR3 memory rose to $46 from $44, while the price of DDR2 remains flat as manufacturers wind down on making memory chips for the older memory standard.
The company estimates that major memory manufacturer Samsung is likely to maintain high operating margins of 30 percent in the second quarter.
The memory vendors want the world+dog to move switftly to DDR3, with an estimated 60 percent figure during this quarter. And there’s tight supply on DDR3, so that price is likely to continue to rise as the year goes on.
Now the manufacturers are seeing clear profits on memory.
It’s not just the contract market – that is to say memory supplied to PC manufacturers – that’s buoyant. The spot memory market is also doing well.
The picture illustrated is an Armenian 50,000 Dram note – money talks and it’s a more interesting picture than a DIMM, some might say.