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Hynix Semiconductor has become the world’s second largest producer of dynamic random access memory (DRAM) in the fourth quarter of 2006 after increasing its quarterly shipments by nearly 50%. While Samsung Electronics is still on top of the list, South Korea inches closer to controlling half of the world’s DRAM market according to DRAMeXchange’s observations.

The Seoul, Korea-based DRAM supplier has increased its sales by 45.4% quarter-over-quarter and got 19.8% of random access memory market, claims DRAMeXchange. At the same time, Samsung increased its sales by 12.4% sequentially, maintaining control of about a quarter of the global DRAM market. Qimonda controlled 14.3% and was the only company in the world’s top 10 DRAM makers who lost 0.5% of sales.

Micron and Elpida commanded 11.5% and 11.2% of memory market respectively, but while Elpida’s sales grew 28.5% quarter-over-quarter, Micron’s revenue soared 16.5%, which is just 0.3% higher than the whole DRAM industry growth percentage.

Revenues breakdown by regions in Q4 2006 reveals that the Korean makers continue to assume the leading role by capturing 44.6% of the DRAM market share. Taiwanese makers come in second, accounting for 17.8%. This was lower than the 19.5% share recorded for Q306. Many of the newly operational fabs in the second half of 2006 were located in the Taiwan area. However, Taiwanese branded companies still experienced a slide in their market share for Q4 2006, as the increased output were sold to their respective strategic partners.

After the DRAM industry’s downturn in 2000, DRAM makers gradually started to focus in expanding their production capacities. According to data compiled by DRAMeXchange, 6 new 12” fabs became online in 2006. Some of the manufacturing capacities were newly constructed, while others were converted from 8” fabs. This increased the number of 12” fabs around the globe to 23. As each player races to expand their share of the pie, more production facilities are being planned for construction. By 2007, it is expected that the number of 12” fabs will reach 27.

Several DRAM makers have forged strategic alliances with each other to boost their DRAM production. At the same time, they are also allocating resources in building their own 12” fabs. These developments are causing a market shakeup in the DRAM sector.

It can be noticed that companies who have formed a joint venture, are starting to squeeze Samsung’s market share. Micron, who has a high ratio of 8” fabs, is also seeing a declining market share. From the 20% share in 2005, it has slid to 11% in Q4 2006, according to the firm.


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