by Anton Shilov
03/27/2012 | 11:48 PM
It is not a secret that South Korea-based makers of dynamic random access memory (DRAM) have been gradually increasing market share for the past decade to ~65% - 70% in the recent year or two. In a bid to stay competitive against SK Hynix Semiconductor and Samsung Electronics, other manufacturers will have to form strong alliance in order to stop money hemorrhaging.
Analysts from DRAMeXchange, a division of TrendForce, DRAM manufacturers from Japan (if one remain after Elpida's restructuring), Taiwan and the U.S. are unable to efficiently compete against Hynix and Samsung in terms of economies of scale, technology migration speed, and product mix, which in the long term may result in control of the memory market by two companies from South Korea. Looking at the DRAM industry competition, DRAMeXchange believes a Taiwan-U.S.-Japan alliance is the only way the makers would be able to go up against the Korean manufacturers.
If Taiwanese makers are able to maintain timely mass production and economies of scale for wafer starts, in addition to good yield rates and technology migration support, they could bear the heavy burden of reducing cost.
As for U.S. makers, not only are they on good terms with PC OEMs, their server DRAM market share is satisfactory, and they could combine their flash products with mobile DRAM to make headway on the smartphone and tablet PC markets.
Japanese makers are not far behind their Korean counterparts in terms of commodity and mobile DRAM yield rate and technology migration. If they move more production to Taiwanese manufacturers and cooperate with U.S. makers on MCP production to target the mobile device market, cost management and profitability will improve.
If the tri-national alliance is successful, their total capacity would be around 410 thousand wafers per month, 34% of global DRAM capacity, and the DRAM industry would be comprised of three equally strong contenders.