DRAM Market Hits Bottom

DRAM makers experienced a "terrible" second quarter, with global revenues dropping 24 percent to $7.3 billion from $9.7 billion in the first quarter, according to iSuppli Corp. DRAM per-megabit Average Selling Price (ASP) plunged 39 percent—marginally good news because it was slightly less than the 40 percent drop iSuppli had originally predicted. The research firm attributed poor market conditions to oversupply, which contributed to a drop in prices. Megabit shipments increased 23 percent during the period—nearly 3 points higher than the increase predicted by iSuppli. The quarter took its toll on DRAM Makers like Samsung Electronics Co. Ltd. and Micron Technology Inc., which suffered 17 percent and 16 percent respective declines in revenue during the quarter. The companies, however, were able to grow their market share. Only one supplier—Etron Technology Inc.—grew its revenue in the second quarter. As expected, the Top-5 suppliers—Samsung, Hynix, Qimonda, Elpida and Micron—all provided production guidelines for the third quarter that were lower than their shipments in the second quarter. Reduced supply growth in the third quarter, along with a seasonal demand pick up, will stabilize market conditions in the second half of the year, iSuppli predicts.