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7/27/2007
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Global DRAM Market Dives In Second Quarter

Only one supplier in the top 10, Etron Technology, managed to increase revenue in the period.

The global market for DRAM, the most common type of computer memory chip, fell more than 24% in the second quarter, as the per-megabit average selling price plunged 39%, a research firm said Friday.

Market conditions were so bad that Samsung Electronics and Micron Technology, which suffered 16.7% and 15.7% respective declines in revenue, outperformed the market and gained share, iSuppli said. Only one supplier in the top 10, Etron Technology, managed to increase revenue in the period.

Worldwide revenue for the quarter fell to $7.3 billion, down from $9.7 billion in the first quarter, iSuppli said. A major reason for the poor market condition was oversupply as megabit shipments rose quarter-to-quarter by 23 % to 2.6 billion units. The increase was on top of the 21% rise in the first quarter. The number of shipments in the first half of the year soared by 89 % over the first half of 2006, iSuppli said.

Industry leader Samsung increased shipments by 34% and claimed a 28.4% slice of the DRAM market in terms of dollars in the second quarter. Nevertheless, the company's DRAM revenue fell by $419.2 million compared to the first quarter.

No. 2 Hynix Semiconductor saw sales fall by 29.7%, leaving the company with a 20.7 % market share in terms of dollars. The company, however, lost the top position in terms of unit shipments to Samsung.

U.S. manufacturer Micron, ranked fifth by iSuppli, managed to increase its market share in terms of revenue to 10.1%, up 1% from the previous quarter. Rounding out the top five vendors were Qimonda, which had a 13.5% share following a 23% drop in revenue quarter-to-quarter; and Elpida, which finished the quarter with a 12.1% share following a decline of 24.4%.

All of the top five suppliers have said they would lower shipments in the third quarter, which is usually a better quarter for demand. As a result, the market is expected to improve. "The market clearly hit the bottom in the second quarter, and the suppliers' profitability will be much better in the second half of the year," iSuppli said in a statement.

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