Tag: Nanya

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..

Nanya getting into 20 nanometre

63-CH3SNAS_DRAMNanya Technology is raising the cash to convert its 12-inch production to a 20nm process.

Company president Pei Ing Lee told Digitimes that Kingston and another Taiwan-based DRAM module firm have expressed interests partnering in the project.

Nanya wanted to raise funds in early 2015, but postponed it because the market really was not up to it. DRAM prices have been falling for a while and this has dragged down the worldwide output in value in 2015. Making more DRAM this year was a silly idea.

What makes it worse is that Nanya and other DRAM makers were optimistic about 2015, but actual market conditions were worse than expected. Nanya will move to speed up its transition to a “die-shrink” 30nm node technology, Lee indicated.

Nanya has converted 40 percent of the company’s total wafer start capacity to the process, and the proportion will exceed 50 percent in the fourth quarter.

Lee noted that PC DRAM prices remain under downward pressure in the fourth quarter of 2015, but end-market demand is picking up. Nevertheless, customers are still engaged in inventory adjustments, Lee said.

Nanya said it had consolidated revenues of US$320 million for the third quarter of 2015, down 7.3 percent sequentially. During the quarter, Nanya’s bit shipments increased by 0.9 percent.

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.

DRAM prices set to drop

Samsung DRAMA combination of better technology but slower demand for dynamic random access memory (DRAM) will lead to prices dropping until the end of the year.

Market research company DRAM Exchange said that there’s weak demand for both notebooks and smartphones and the major manufacturers all showed a revenue fall.

Korean manufacturers Samsung and SK Hynix between them held 70 percent market share during the second quarter, but US manufacturer Micron’s market share fell to around 20.7 percent during that quarter.

Samsung is way ahead of the pack on the manufacturing front and is outstripping its competitors who won’t catch up to the firm’s 20 nanometre process for at least another six months, said DRAM Exchange.  The smaller the process technology, the more DRAM chips can be produced on a single wafer.

Micron won’t be able to produce memory chips using the 20 nanometre process until the first quarter of next year, while other players including Nanya and Inotera will take longer to catch up.

This is how the major DRAM players are doing in terms of market share.

DRAM market share 2015

Mobile DRAM prices flatten

Samsung DRAMAttempts by manufacturers to put up their prices on mobile DRAM appear to have stalled.

In the first quarter, said memory watcher DRAMeXchange, mobile DRAM revenues totalled $3.576 billion which is actually a small decline compared to the same quarter last year.

But despite that, mobile DRAM now accounts for 29.8 percent of total shipments worldwide and that figure will continue to increase.

Average selling prices for mobile DRAM are stable, while shipments grew as Samsung ramped up volumes by producing chips at 23 nanometres.

DRAMeXchange anticipates that prices will stay stable for the whole of the first half of this year. While next generation iPhones will use 2GB of mobile memory, prices will fall.

While the outlook is rosy for mobile DRAM, PC memory prices have fallen.

The major memory manufacturers are Samsung, SK Hynix and US firm Micron. Other much smaller players are Taiwanese companies Nanya and Winbond with the latter having a global market share of only one percent.

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

Elpida's bankruptcy causes business boom boon

Elpida’s somewhat unsurprising bankruptcy will solidly kick up prices in the shaky DRAM industry, as competitors are forced to up their average selling prices.

Elpida committed sudden seppuku earlier this week. The Japanese company was known to be in trouble, with over $1 billion debt payments piled up in the company’s inbox. Still, Elpida is considering soldiering on, and manufacturing might continue. Its facilities have not cut their output yet.

Mike Howard, senior principal analyst at IHS, said that it’s unlikely all of Elpida’s production will disappear, however, the developments “could mark a new era for the DRAM market – one marked by stronger pricing power for suppliers.”

If, says analyst group IHS iSuppli, over a quarter of Elpida’s capacity is killed, average selling prices for all DRAM shipments should reach as high as $1.21 by the year’s end – an increase of 15.5 percent compared to $1.05 in the first half of the year. Without reducing capacity, prices will still rise, but a paltry 8.5 percent up to $1.13 by the end of 2012.

Overcapacity worries markets, but so, too, does undersupply – and this is looming on the horizon if Elpida’s capacity goes offline. Shipments will decrease, but the remaining rivals will put up their prices which will, in turn, boost revenues.

Elpida’s manufacturing assets have not been carved up yet, and the debate is still out on what’s to be done. While the board will no doubt mourn the loss-making, Tokyo subsidised DRAM maker, competitors will enjoy what IHS calls a “much rosier” 2012 than the situation was as recently as a week ago.

According to cautious IHS estimates, Elpida popping its clogs could lead to overall revenues for the DRAM market over $30 billion for the full year. Compared to its previous forecast of $24 billion, you’d be hard pressed to find many mourning Elpida’s passing.

Existing Elpida customers are expected to embark on a frenzied DRAM land-grab as they search for alternative sources. Samsung, Hynix, Micron and Nanya will be particularly enthused as they pick at the bones of Elpida’s clients.

Elpida DRAM merger would put the wind up Samsung

Elpida may well seem like a sinking ship at the moment, but analysts believe that a revitalising merger with Micron would have even Samsung worried.

The Japanese DRAM maker has been flailing in the wind for some time now, and lurched to new lows earlier this week after admitting “uncertainty” over its future.  Elpida’s share price dropped soon after, with the outlook of even a bail out by the Japanese government looking increasingly unlikely.

With debts mounting, and the difficulty in making money in the DRAM market, analysts having been mulling the effects of an exit by Elpida.   While it is thought that such a move could help drive the industry back to profitability – indeed, as Elpida’s value dropped, others in the industry were buoyed – there are also concerns that a damaging oligopoly could soon be brought about in the market.

However, with Micron waiting in the wings for a merger there is also a chance that the two could team up to give Samsung a run for its money. Currently, Samsung is the only DRAM firm which is able to draw a profit, and owns a large chunk of the market.

Analysts at IHS iSuppli believe that if the will-they-won’t-they DRAM romance actually happens then there could be a serious challenge to money-bags Samsung.

A union between the two would immediately make them the closest challenger to Samsung, with 28 percent of the market compared to Samsung’s 33 percent.  This would cut the usual 10 point gap between Samsung and its nearest rival to just five percent, according to the report.

In terms of production, an Elpida and Micron merger would reach 374,000 wafer starts per month, edging closer to Samsung’s 433,000 WSPM and leapfrogging Hynix’s 300,000 WSPM.

There are some barriers in the way, though.

Firstly, there is Elpida’s large and mounting debts.  With Elpida thought to be owing in the region of $4 billion, debt-shy Micron is likely to be wary.   The strong yen doesn’t make production in Japan particularly attractive either, with cheaper options in Korea and Taiwan.

Furthermore, the partnership between Micron and Nanya could throw in  problems for a merger with another DRAM player.  This, alongside the sad death of Micron CEO Steve Appleton, could well be delaying any potential moves by Micron.

Of course, for both Micron and Elpida there could be sunbstantial gains in any merger.  This would mean Elpida getting its mitts on some of Micron’s higher selling prices, with Elpida’s DRAM selling at $0.70 per gigabyte compared to $1.34 for Micron.  On the other side of the coin it would mean Micron getting stuck into what is one of the few well performing areas of DRAM manufacturing – mobile DRAM.

A merger between the two may not serve the rest of the market so well, as one less supplier leaves the stage and consolidation leads to greater leverage over customers.

It would also mean, however, that the Samsung oligopoly would be foiled with the swift rejuvenation of Elpida alongside Micron putting the wind up the Korean giant.

 

Elpida becomes the Greece of the DRAM industry

Analysts have been claiming that Elpida is fast becoming the Greece of the DRAM industry and some think the Japanese government would be better off letting it go under.

Elpida said that it could obtain financing for $1.2 billion in bonds and loans due by April and it is headed up a brown creek without a means of propulsion.

Normally that would mean that the Japanese government might have to write a cheque to bail it out, but the strokers of beards and people in the know think that it might refuse this time.

By doing so it might force the DRAM industry closer to an oligopoly.

Rivals Samsung and Hynix shares rose at the news that Elpida was suffering. And the Taipei-based DRAMeXchange said in a statement yesterday that the hands of a doomsday clock of an oligopolistic state in the DRAM market moved closer to midnight.

DRAMeXchange said that if the Japanese government does not step in to offer assistance and Elpida backs out from the DRAM industry due to financial difficulties, the negative impact on the PC and DRAM markets will be severe.

With such a small number of companies involved in making DRAM competition is almost nonexistent and the suppliers can change what they like.

It thinks that the Japanese government will see sense and bail the outfit out. It would blemish its name by not supporting the supplier of chips because that would mean lenders won’t get their money back and 6,000 workers may lose their jobs.

Yuichi Ishida, a Tokyo-based analyst at Mizuho Investors Securities told Business Week that Elpida’s situation is similar to that of Greece. The government has to save Elpida because no one will benefit from it being flushed down the loo.

Others are not so happy. Takashi Aoki, a senior fund manager at Mizuho Asset Management, said that Japan’s government shouldn’t bail out Elpida because the country did not really need to have the DRAM makers as part of its national policy.

It’s hard to see growth in Elpida and there are many developed countries that don’t have DRAM makers, he said.  But then there are lots of countries that dont have Ouzo or Nana Mouskouri either.

Nanya denies Elpida and Micron tie up

Despite the company’s share price soaring on the back of rumours that it was about to announce a tie up with Elpida and Micron, Taiwanese chipmaker Nanya said that it has no plans to go ahead with it.

Nanya Chairman Chia Chau Wu told Reuters  that he did not know of any deal between the other two companies and the company had no current intention to take part in one.

Although he did not say if Nanya would welcome any such tie-up, it seems that at the moment it is not being negotiated.

The rumours started last week when Japan’s Nikkei business newspaper reported that Elpida would seek to eventually include Nanya’s parent company, Formosa Plastics Group.

All three DRAM chipmakers have been hit by slumping prices in a weak economy and falling sales.

Nanya was always going to be the junior partner in any consolidation. At four percent its market share is not high, but together with Micron and Elpida, the three will rank second. Micron and Elpida both had around 12 percent each.