Memory market makes slight gains
Second-quarter revenue for DRAM makers was up slightly year over year, but consolidation still reigns in the market, a new report shows.
Revenue in the market for DRAM, which is mainly used to store data in personal computers, totaled $3.72 billion worldwide in the second quarter. The figure represents a slight sequential decline from $3.74 billion during the first quarter, but the market also saw a slight year-over-year gain. Revenue for the second quarter of 2002 was $3.69 billion, Gartner said.
Consolidation continued as a factor in the market as the top six DRAM makers accounted for 87.1 percent of revenue during the second quarter, up from 85.2 percent in the first quarter, as the industry continued to consolidate. The top manufacturers gained as the "other" category shrank, when Mitsubishi discontinued its DRAM sales during the first quarter, Gartner said.
It's been a tough several years for DRAM makers, who cut prices to the bone during the economic and PC market downturn, which began in late 2000. The pricing decline led to a rash of consolidation in the industry as companies tried to stem huge losses. DRAM prices have fluctuated since the downturn. However, they began creeping up again during the second quarter, according to several analysts and PC maker Dell, which on Thursday said when it reported earnings that memory prices had increased.
Price increases, combined with predicted seasonal increases of PC shipments, should boost the DRAM market during the third and fourth quarters. But, as in the past, conditions could change.
"Things are getting better. Pricing has been ticking up nicely and has been on the upward trend now for about three months," said Andrew Norwood, an analyst at Gartner. "However, the DRAM companies can always throw it away by cranking up production."
For its part, Samsung garnered 31 percent of market revenue for the quarter, ending with revenue of $1.2 billion, Gartner said. Micron Technology followed with $705 million in revenue, giving it 19 percent of the market. In third place was Infineon Technologies with $574 million or 15 percent of the market, its highest share to date.
Hynix Semiconductor ranked fourth with $510 million or 14 percent of the market, Gartner said. But the company faces a difficult position in the United States and Europe, due to duties that add about 44 percent and 35 percent, respectively, to its prices. Because of the duties, the company will have to shift its focus to other areas of the world, Gartner said.
Despite the duties, Hynix did relatively well during the third quarter, Norwood said. "If Micron or Infineon was thinking these tariffs would cut Hynix out of the market, they're going to be disappointed."
Nanya Technologies was a distant fifth with $164 million in revenue or just over 4 percent of the market, Gartner said.