Price Check Q3 2016: DRAM Prices Down Over 20% Since Early 2016

Samsung Retains Market Leadership

According to DRAMeXchange, the global DRAM industry earned $8.56 billion revenue in Q1 2016, down from $12.1 billion in Q1 2015 (-29.3%) and from $10.27 billion in the fourth quarter of last year (-16.6%). Analysts have stated that the dropping prices for DRAM ICs and relatively low demand for computer memory as primary reasons for the revenue declines.

With a nearly 30% year-over-year decrease, it is not surprising that all DRAM manufacturers suffered from declining revenue and dropping margins, even though the industry stayed profitable as a whole in the first quarter.

Samsung remained the world’s largest supplier of DRAM in the first quarter with 46.4% of the market (up from 43.1% in Q1 2015), not challenged by its key rivals. Meanwhile, SK Hynix commanded 27.1% of DRAM shipments in the first quarter of 2016, slightly down from the previous quarters. The third largest DRAM maker, Micron, controlled 18.5% of the planet’s DRAM sales in Q1 2016, a significant decrease from 22.5% in the same period a year before.

But Smaller Vendors Pick Up Pace

By contrast, smaller makers like Nanya, Winbond, PowerChip and some other managed to increase their shares slightly in the first quarter of this year. The analysts believe that this happened because they increased their output and could simply supply more DRAM than usual.

Wrapping everything up, it is evident that the transition to DDR4 memory is proceeding rapidly and the industry will produce more DDR4 bits than DDR3 bits later this year. As a result, DDR4 should trend towards being cheaper than DDR3 when the amount of DDR4 will significantly outpace the older technology. It is also noteworthy that Samsung will be able to greatly benefit from its 18 nm fabrication technology in the second half of this year, as its rival Micron is not expected to be ready with its 16 nm manufacturing process before Q4. Thus, Samsung may be able to sell its high-performance and/or low-power DRAM ICs at a premium.