Samsung Maintains Top Slot In DRAM Market In Q3 Despite Revenue Drop

Samsung Electronics suffered a slight drop in its presence in the global DRAM (Dynamic Random Access Memory) market in the third quarter of the year, but maintained its top position.

According to market tracker TrendForce, the South Korean tech giant, also the leader in the NAND flash sector, had a 41.3 per cent share of the global DRAM market in terms of revenue in the July-September period, down 2.2 percentage points from a quarter ago, reports Yonhap news agency.

Samsung's revenue from DRAM chips came to a total of $7.21 billion in the third quarter of 2020, down 3.1 per cent from a quarter earlier, the market tracker said.

SK hynix, Samsung's smaller domestic rival, stayed in the second spot with a 28.2 per cent share, down 1.9 per cent points from a quarter earlier, after its revenue dropped 4.4 per cent quarter-on-quarter to $4.92 billion.

"Samsung's and SK hynix's quarterly revenues registered a decline because the increases in their respective shipments were marginal and insufficient to compensate for the declines in their respective average selling prices (ASPs)," TrendForce said.

US chipmaker Micron Technology Inc. was the No. 3 player. Its market share jumped to 25 per cent in the third quarter, up 4 per cent points from a quarter earlier, after its revenue soared 21.9 per cent quarter-on-quarter to $4.3 billion.

"Micron experienced a smaller drop in the ASP for its latest fiscal quarter," TrendForce said. "Furthermore, Micron also benefitted from the substantial increase in bit shipments and the corresponding reduction in the fixed cost per bit."

When it comes to profitability in the third quarter, TrendForce said DRAM suppliers in general were hit by the price decline in the sector with server manufacturers' weak procurement of chips due to excess inventory.

Samsung managed to keep its operating margin at 41 per cent in the third quarter due to its cost optimization efforts, according to TrendForce. However, SK hynix saw its operating margin falling to 29 per cent, down 6 per cent points from a year earlier as server DRAM makes up a substantial share of its product mix, the market researcher said.

Global DRAM revenue increased by only 2 per cent quarter-on-quarter to $17.46 billion in the third quarter. TrendForce expected the DRAM market in the fourth quarter to be similar to the third quarter.

"The persistent weakness of the server DRAM segment will continue to exert downward pressure on the overall ASP of DRAM products," it said. "As such, the fourth quarter of 2020 will again see rising bit shipments and falling prices."

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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