Smartphone shipments peaked in the fourth quarter on account of the normal busy season. Chinese language smartphone manufacturers continued to submit sturdy gross sales whereas Apple benefitted from the discharge of iPhone 7. “Rising demand for mobile DRAM stored squeezing the business’s manufacturing capability for PC DRAM,” mentioned Avril Wu, analysis director of DRAMeXchange. “Contract costs of PC DRAM modules elevated by greater than 30% sequentially on common in the fourth quarter as a result of inadequate market provide. Server DRAM lagged behind PC and mobile DRAM in phrases of price hike throughout the identical interval, however it’s anticipated to catch up in the primary quarter of this 12 months.”
Trying forward, memory content material for numerous units will proceed to extend. Additionally, the present capability enlargement efforts undertaken by suppliers is not going to begin to have an effect on the market till the second half of 2017. Within the meantime, the overall undersupply drawback will worsen, and contract costs of PC DRAM modules in this primary quarter might even see a fair bigger sequential enhance of almost 40% on common. Rising costs are anticipated for the second quarter as properly.
Prime three DRAM suppliers noticed important enhance in their working margins
There was no change in the income rankings of the highest three DRAM suppliers in the 2016 fourth quarter. Samsung, SK Hynix and Micron have been respectively first, second and third. With the distinctive third-quarter end result as the bottom, Samsung managed to attain a 12% sequential development in the fourth quarter, totaling US$5.9 billion and taking 47.5% of the worldwide DRAM market. SK Hynix additionally did properly revenue-wise in the identical interval, posting a 27.3% enhance in contrast with the prior quarter to succeed in US$3.3 billion. SK Hynix’s world market share was round 26.7%. Third-place Micron registered a sequential development of 24.4% and captured 19.4% of the worldwide market. Collectively, the worldwide market share of the 2 main South Korean suppliers got here to 74.2% in the fourth quarter.
Upswing of costs pushed up suppliers’ fourth-quarter working margins as properly. Samsung’s working margin went as much as 45%, whereas SK Hynix noticed a rise from 25% in the prior quarter to 36%. Micron’s working margin made an enormous leap from 3.7% in the third quarter to 14.9% in the fourth. Going ahead, the persevering with price uptrend implies that suppliers will take pleasure in rising revenue in the primary quarter of 2017.
Concerning know-how migration, Samsung goals for the 18nm course of this 12 months as to fulfill rising demand from shoppers and hold a snug lead over opponents. Samsung has designated its fab Line 17 for the deployment of the 18nm course of and can be contemplating to produce other fabs to undertake the know-how. The provider’s goal is to have a minimum of 40% of its whole DRAM output coming from the 18nm course of by the top of 2017.
SK Hynix this 12 months can be focusing on elevating the yield for its 21 course of so the know-how can have a bigger share of the general DRAM output. SK Hynix may even start emigrate to the 18nm course of in the second half of 2017. The provider desires to have the know-how prepared for mass manufacturing as quickly as attainable.
As for Micron, its subsidiary Micron Reminiscence Taiwan has already begun mass manufacturing for its 18nm course of this January. Micron Reminiscence Taiwan plans to transition most of its manufacturing capability to the know-how by the top of this 12 months. If this course of goes properly, Micron can also have the newly acquired Inotera to undertake the 18nm manufacturing in the second half of 2017.
Trying on the income outcomes of Taiwan-based suppliers for the ultimate quarter of 2016, Nanya registered a sequential enhance of 18.2% as a result of sturdy demand from shoppers and rising costs of specialty DRAM merchandise. Nanya is accelerating the transition to the 20nm manufacturing to additional cut back value. The provider will attempt to obtain a capability of 30,000 wafers monthly for its 20nm course of by the top of 2017.
Winbond’s fourth-quarter DRAM income fell barely by 4.6% in contrast with the prior quarter. This was primarily attributed to the provider adjusting its product combine and shifting extra capability to NOR Flash manufacturing due to the high demand for the product. By way of know-how, Winbond will hold increasing the share of its 46nm course of inside its DRAM output and step by step enhance its 38nm output. Winbond has scheduled to start mass manufacturing for its 38nm course of in the second half of 2017. The transition to the superior know-how can be mirrored in the provider’s income efficiency by then.
Powerchip registered an exceptional 59.2% sequential income development in the fourth quarter of final 12 months as the corporate regained misplaced prospects and benefitted from high contract manufacturing costs which might be the results of the booming DRAM market.