Ron@Maltiel-consulting.com -  Semiconductor & Patent Expert Consulting

                                                                   Litigation expert consultant and patent expert witness for process, device, and circuit of  Dynamic

 Ram (DRAM), Flash  (NAND, NOR, EEPROM), and Static Ram (SRAM) Memories,

 and Microprocessor, Logic, and Analog Devices.

Nanya shines in 2005 DRAM market; Hynix wins big in NAND flash ranking, says iSuppli  Press release;

Esther Lam, DigiTimes.com [Tuesday 14 February 2006]

In a year when worldwide DRAM revenue declined, and nine of the top-10 suppliers in the market suffered sales decreases, Nanya Technology in 2005 managed to expand its revenue by nearly 30%, and to improve its ranking by one position, according to iSuppli.

Taiwan-based Nanya posted DRAM sales of US$1.5 billion in 2005, up 28% from US$1.2 billion in 2004. The company ended 2005 with a market share of 6.1%, up from 4.5% in 2004, putting Nanya in sixth place, up from seventh in 2004. Nanya in 2005 became Taiwan’s largest DRAM supplier, surpassing its domestic rival, Powerchip Semiconductor Corporation (PSC).

Nanya’s strong performance contrasted sharply with the weak results for the entire DRAM market, which declined to US$24.8 billion in 2005, down 6.4% from US$26.5 billion in 2004. Revenues were reduced by the decline in the DRAM average selling price (ASP), which reversed a vigorous rise in unit shipments. Global per-megabyte unit shipments of DRAM in 2005 rose by 57% – but the ASP fell by 40%.

Nanya benefited from a 126% increase in its DRAM bit shipments for the year, mainly due to the rapid production ramp at its manufacturing partner, Inotera Memories, said Nam Hyung Kim, director and principal analyst with iSuppli.

DRAM market leader Samsung Electronics posted the second-best performance of all suppliers ranked by iSuppli in 2005, limiting its sales decline to 0.9%. The South Korean memory giant achieved DRAM revenue of US$7.46 billion in 2005, down from US$7.53 billion in 2004. This allowed Samsung to increase its market share in 2005 to 30.1%, up from 28.5% in 2004.

Infineon Technologies had the biggest decline among the top-five DRAM suppliers in 2005, with its revenue falling to US$3.2 billion, down 12.4% from US$3.68 billion in 2004. However, the company maintained its fourth-place ranking from 2004.

Poor DRAM market conditions persisted in the fourth quarter of 2005, with only two suppliers achieving sales growth compared to the third quarter: Nanya and Japan’s Elpida Memory. With all the other DRAM suppliers suffering sales decreases, fourth-quarter DRAM revenue declined to US$6.1 billion, down 4% from US$6.37 billion in the third quarter.

However, with a stronger-than-expected start to this year, the global DRAM market could be headed for better conditions in 2006 than it faced in 2005, iSuppli believes.

Promos Technologies of Taiwan is executing a recovery strategy to turn around from its 23.6% decline in DRAM revenues in 2005. The company plans to institute a more aggressive ramp of its 12-inch wafer production.

Meanwhile, Elpida and Infineon in 2006 are expected to increase their DRAM market shares at the expense of their competitors, Samsung, Hynix and Micron, which are becoming increasingly focused on NAND flash memory.

DRAM makers market share by revenues estimate, 2005 (US$mn)

Company

2004 rank

2005 rank

4Q 2005 revenue

4Q market share

2005 revenue

2005 market share

2005/2004 revenue growth

2004 revenue growth

Samsung

1

1

 $1,818

29.7%

 $7,460

30.1%

(0.9%)

 $7,531

Hynix

2

2

 $1,020

16.7%

 $4,117

16.6%

(4.0%)

 $4,288

Micron

3

3

 $913

14.9%

 $3,813

15.4%

(9.4%)

 $4,209

Infineon

4

4

 $778

12.7%

 $3,226

13.0%

(12.4%)

 $3,681

Elpida

5

5

 $478

7.8%

 $1,776

7.2%

(1.7%)

 $1,807

Nanya

7

6

 $416

6.8%

 $1,509

6.1%

28.0%

 $1,179

PSC

6

7

 $280

4.6%

 $1,205

4.9%

(9.3%)

 $1,329

ProMOS

8

8

 $232

3.8%

 $890

3.6%

(23.6%)

 $1,165

Etron

10

9

 $50

0.8%

 $161

0.6%

(10.6%)

 $180

Elite

9

10

 $32

0.5%

 $138

0.6%

(43.4%)

 $244

Others

 

 

 $106

1.7%

 $476

1.9%

(43.4%)

 $841

Total

 

 

 $6,123

100.0%

 $24,771

100.0%

(6.4%)

 $26,454

Source: iSuppli, February 2006.

Hynix wins big in 2005 NAND flash ranking

Hynix Semiconductor’s NAND flash memory sales surged by more than 500% in 2005, propelling the company into third place in the market last year, and putting it into contention with Toshiba for the number-two rank in 2006.

Hynix’s NAND flash memory revenue rose to US$1.4 billion in 2005, up 525% from US$221 million in 2004. The South Korean chipmaker’s strong performance allowed it to surpass Japan’s Renesas Technology and take the number-three rank in NAND flash memory sales in 2005, up from fourth place in 2004.

Hynix gained momentum at the end of year, with more than 40%, or US$600 million, of its 2005 NAND revenue coming in the fourth quarter. This put Hynix within US$80 million of rival Toshiba, which posted revenue of US$680 million for the fourth quarter. In contrast, Toshiba’s NAND revenue was nearly twice as high as Hynix’s in the third quarter.

Hynix’s stunning performance in the fourth quarter likely was due to rising NAND sales to the MP3 player and removable flash storage card markets, said Nam Hyung Kim, director and principal analyst with iSuppli.

Furthermore, Apple in 2005 engaged in negotiations with Hynix to supply NAND flash for its wildly popular iPod nano music player. Hynix was tasked to act as a second source to Apple’s main NAND supplier, Samsung.

The rapid sales gains at Hynix have set the stage for a fierce NAND market-share battle with Toshiba in 2006, iSuppli believes. This battle promises to be riveting, with both companies gearing up for the fight.

Hynix intends to boost production of its cost-effective multi-level cell (MLC) flash memory this year, as it makes a run for the number-two ranking. In a recent conference call, Hynix announced it would devote US$3.4 billion to semiconductor capital spending this year. Meanwhile, Toshiba and partner SanDisk plan to accelerate the production ramp at their 12-inch fab to 70,000 wafers per month by the first quarter of 2007, up from 25,000 per month now.

Despite Hynix’s bravura performance, it still didn’t achieve the fastest NAND growth rate in the fourth quarter. That honor went to Hynix’s manufacturing partner, STMicroelectronics (ST) of Europe, which sold US$89 million worth of NAND flash in the fourth quarter, up 64.8% sequentially from US$54 million in the third quarter. For the entire year, ST attained NAND revenues of US$215 million, up 760% from US$25 million in 2004.

Micron Technology achieved the fastest growth of all NAND flash memory suppliers in 2005, with its sales rising to US$238 million for the year, up 2375%from just US$8 million in 2004.

Samsung in 2005 continued to dominate the NAND flash market with a 52.9% share. However, its share declined from 58.7% in 2004.

The worldwide NAND flash market grew to US$10.9 billion in 2005, up 64% from US$6.6 billion in 2004. iSuppli predicts the market will continue expanding this year, with global sales rising to US$6.8 billion, up 55% from 2005.

NAND makers market share by revenues estimate, 2005 (US$mn)

Company

2004 rank

2005 rank

4Q 2005 revenue

4Q market share

2005 revenue

2005 market share

2005/2004 revenue growth

2004 revenue growth

Samsung

1

1

 $1,802

50.4%

 $5,742

52.9%

47%

 $3,901

Toshiba

2

2

 $680

19.0%

 $2,382

21.9%

29%

 $1,850

Hynix

4

3

 $600

16.8%

 $1,382

12.7%

525%

 $221

Renesas

3

4

 $250

7.0%

 $735

6.8%

23%

 $600

Micron Technology

7

5

 $108

3.0%

 $238

2.2%

2875%

 $8

ST Microelectronics

6

6

 $89

2.5%

 $215

2.0%

760%

 $25

Infineon

5

7

 $45

1.3%

 $165

1.5%

450%

 $30

Total NAND Revenue

 

 

 $3,574

100%

 $10,859

100.0%

64%

 $6,635

Source: iSuppli, February 2006.