TAIPEI – The global DRAM industry posted $8.56 billion in revenue in the first quarter, down 16.6% sequentially, says DRAMeXchange, a division of TrendForce. The research firm attributes the decline to market oversupply and sliding average selling prices.

“While there was some demand from smartphone inventory restocking in China, the first quarter is traditionally the slow period, and downward revisions on notebooks and iPhone shipment estimates further exacerbated the oversupply problem in the DRAM market,” said DRAMeXchange research director Avril Wu.

In the first quarter, Samsung securely held its position as the industry’s revenue leader, the firm says. Although Samsung’s revenue fell 16.6% sequentially to $3.97 billion, its market share remained constant at 46.4%.

Sliding prices significantly impacted SK Hynix’s revenue, resulting in a 19.2% sequential decline to $2.32 billion. SK Hynix retained second place in the revenue ranking with a market share of 27.1%. Micron also continued to fill the No. 3 spot with a market share of 18.5%.

Looking at suppliers’ first-quarter operating margins, Samsung and SK Hynix were at 40% and 14%, respectively. Both South Korean memory makers suffered only a slight drop compared with the previous quarter, says DRAMeXchange. Micron, on the other hand, posted a negative operating margin of 1.2%, which was a sharp deterioration compared with 8.5% in the fourth quarter of 2015.

Samsung continues to raise the percentage of 20nm production in its total output. The yield rate of Samsung’s 20nm process is also higher than its competitors’ advanced processes, says the research firm. Thus, Samsung currently has the lowest production cost among the top three suppliers. The South Korean memory maker plans to begin migrating to 18nm technology in the middle of this year. By further improving the cost structures of mobile and PC DRAM products, Samsung will be able to remain profitable, even as the prices keep falling.

SK Hynix began adopting 21nm technology in the fourth quarter of 2015 and ramped up production on this process in the first quarter of this year. However, all of SK Hynix’s 21nm products were still in the client testing phase, so their contribution to first-quarter revenue was marginal.

Micron migrated to 20nm technology in the fourth quarter last year and has completed the client testing for most PC and server DRAM products made on the advanced process. However, there is still room for improvement on the yield rate, so cost-reduction is limited.

Nanya fared relatively well among the global DRAM makers, maintaining the same revenue level as the previous quarter, with a gross margin of 32.7%. Nanya’s result was mainly attributed to an increase in the total output that came from the expansion of its 30nm-shrink production.

Powerchip’s DRAM capacity reached 88,000 wafers per month in the first quarter, up by 4000 wafers compared with the fourth quarter of 2015. This small capacity increase boosted Powerchip’s revenue slightly.

Winbond experienced small quarterly growth in revenue on account of the company’s long-term efforts to develop the automotive electronics market. Winbond is expected to finish R&D on its 38nm process in 2017. Manufacturing on the 38nm will push the Taiwanese memory maker forward in its technology migration after taking a long pause in recent years.

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