Local makers have good quarter in NAND flash

Samsung Electronics and SK Hynix controlled a combined 45 percent of the NAND flash market between April and June, according to data from market researcher DRAMeXchange.

Ranked No. 1 and No. 5 in the market respectively, they are the only two in the top five to report revenue and market share increases during the period, while the entire market growth remained flat on-quarter.

NAND Flash is a non-volatile memory chip that does not require power to retain data.

Samsung generated $3.76 billion in NAND Flash sales, representing a 16.6 percent increase compared to the previous quarter, while the company’s market share rose to 34.9 percent.

Samsung’s NAND flash market share was above the mid-30 percent level through 2018. It went as high as 45 percent, but crashed down to 29.9 percent in the first quarter of 2019.

DRAMeXchange attributed Samsung’s improvement to a “recovery in server demand, the notable increase in the adoption of high capacity products in various applications and the transferal of orders for mobile devices.”

SK Hynix’s second-quarter market share in the global NAND flash market was 10.3 percent. Revenue in the product sector was $1.11 billion, up 8.1 percent on-quarter.

Quarterly NAND flash market revenue for the second quarter totaled $10.8 billion, flat from the previous quarter but down 33.8 percent from the same period last year when the memory chip industry was at its peak.

The market research company noted that global NAND flash demand between April and June grew 15 percent from the first quarter. The demand growth, however, was not enough to offset the NAND flash price drop as chip suppliers still had high inventories and contract prices fell.

After an unusually long demand and price surge in memory chips - the so-called “super cycle” - came to an end in late 2018, major IT companies started delaying memory purchases, waiting for chip prices to drop further.

Revenue and market share dropped from the first quarter for the other three players in the top five: Tokyo-based Toshiba; San Jose, California-based Western Digital and Boise, Idaho-based Micron.

The revenue of No. 2 ranked Toshiba slumped 10.6 percent on quarter, with the market share retreating to 18.1 percent from the previous 20.2 percent. Western Digital and Micron revenues declined 6.5 percent and 17.7 percent on quarter respectively.

Third and fourth quarters have been traditionally more lucrative for chipmakers. But DRAMeXchange forecast that the on-quarter demand recovery for the year’s third quarter will be “weaker than previous years due to geo-economical conflicts,” largely referring to the U.S.-China trade war.

Concern about local chipmakers has been high after Japan started restricting the export of high-tech materials and parts to Korea starting last month.

DRAMeXchange noted in another report this month that Japan’s recent exclusion from its so-called white list will not have a substantial impact as they merely meanddd Korea will now “have to go through the same procedures as other Asian countries.”

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]