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Hynix Memory, a South Korea-based maker of dynamic random access memory (DRAM), and Winbond, a Taiwanese DRAM manufacturer, were the only two producers of memory for computers in the first quarter in the year among Top 10 to post revenue growth. All the other face decline, following 11% sequential sales drop in Q1.

According to a report by market tracker DRAMeXchange, the revenue of global DRAM brand makers for Q1 2007 experienced an 11% sequential drop. Despite an 18% increase in the global output, the whopping 25% quarter over quarter (QoQ) average selling price (ASP) decline brought forth a slowdown to the DRAM industry production value, which was last seen in Q2 2005. The current market demand has apparently been unable to keep up with the increasing 30” fab output.

In terms of the company sales breakdown in Q1 2007, the performance by Hynix was the most impressive. Bolstered by its 12” fab in China’s Wuxi city, the company's bit growth for the first quarter reached 45%. Amid the huge 25% DRAM price decline in Q1 2007, Hynix was still able to post a 4.6% growth in revenue. The latest figures by Hynix shows it is posing a threat to Samsung’s leading position in the DRAM market, and widening the gap with Qimonda. However, it is expected that Samsung’s bit growth rate will reach above 25% in Q2 2007, while Hynix will experience a slowdown in growth. Therefore, Samsung still has a chance to widen its gap with Hynix. Meanwhile, the 40% bit growth of Elpida helped the company achieve a quarterly earning similar to that in Q4 2006. 

The market shares of Hynix and Elpida are rising sharply, due to their own increased chip production, and production ramp up from their respective joint venture partners. However, for the first half of 2007, excluding Inotera’s second fab, the ramp up of other 12” fabs has started to slow down. In order to further increase the output, manufacturers will need to migrate to even more advanced manufacturing processes. By the second half of the year it is projected that the overall 12” fab capacity growth of Taiwan manufacturers will hit a new peak growth in Q4 2007 and H1 2008.

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