Analyst's Couch: SRAM suppliers' fortunes diverge
By by Betsy Van Hees
09/10/2003 10:18 AM EST
URL: siliconstrategies.com
The following column was provided by Betsy Van Hees, a senior analyst with iSuppli Corp., an El Segundo, Calif.-based market research firm.
For SRAM makers targeting the wireless communications market, the first half of 2003 was the best of times, with sales rising in concert with increased demand for mobile handsets. For those SRAM suppliers dependent on the other major application markets for the memory, i.e. telecommunications, networking and computing, the first half of 2003 was the worst of times, with sales continuing to contract, according to the latest market share estimate from iSuppli Corp.
Sales of mobile handsets grew in the first half, stimulating demand for low-power asynchronous SRAMs and Pseudo SRAMs (PSRAMs). This benefited the major asynchronous SRAM and PSRAM suppliers: Samsung Electronics Co. Ltd., Toshiba Corp., NEC Corp. and Renesas Technology Corp., which was formed from the combination of the semiconductor operations of Hitachi Ltd. and Mitsubishi Electric Corp.
In contrast, the wired communications area continued to struggle in the first half of 2003, hurting the results of companies supplying SRAMs to the market, such as IBM Microelectronics, Sony Semiconductor and GSI Technology.
The net result of the strength in one market and the weakness in the others was modest revenue growth for SRAM in the first half.
iSuppli estimates SRAM revenues in the first half of 2003 rose to $1.23 billion, up 2.8 percent from $1.196 billion in the first half of 2002. While SRAM unit sales increased in the first half of 2003 by 8 percent, the continued weakness in networking and telecommunications, combined with persistent excess fab capacity at multiple SRAM suppliers, caused average selling prices (ASPs) to decline by 5 percent, preventing revenues from rising more.
Memory leader Samsung easily retained control of the SRAM market in the first half, with a 32.5 percent share of revenues. At $400 million, Samsung's first-half 2003 SRAM sales were more than double those of its closest competitor, Renesas.
Renesas, with the combined SRAM revenues of Hitachi and Mitsubishi, grew 49 percent compared to the first half of 2002, while Toshiba's and NEC's sales rose 31 and 37 percent, respectively.
At the opposite end of the spectrum, IBM's first-half SRAM revenues fell 71 percent compared to the first half of 2002, extending the company's slide in this area. In 2001, IBM was the number-two SRAM supplier, but fell to number three in 2002. The company's dismal first-half SRAM sales drove its ranking down to number eight.
Sony's SRAM sales fell 20 percent compared to the first half of 2002, while GSI Technology's revenue dropped 35 percent.
Consolidation helped the SRAM market in the first half, but it wasn't enough to mitigate the overcapacity situation. Micron Technology Inc. exited the SRAM market in the first half of the year.
For the remainder of 2003, iSuppli predicts SRAM lead times will remain at stock to four weeks, with continued price declines during the next few quarters on 1-Mbit and greater-density devices. Prices for 256-kbit and lesser-density SRAMs are expected to remain at their present price points with minimal movement. This outlook is the same for both fast and slow SRAM products.
Although the first half brought a positive revenue trend for SRAMs, iSuppli remains cautious with its forecast for 2003, confining its growth estimate to the lower single-digit percent range.
The expanding replacement cycle for cell phones, sluggish corporate IT spending, uncertain macroeconomic conditions, excess capacity and the lack of a killer application in the foreseeable future are all factors that figure prominently in iSuppli's SRAM forecast. These factors potentially could undermine strong growth in the SRAM market in the remainder of 2003.
Betsy Van Hees can be contacted at the following email address: bvanhees@isuppli.com
Worldwide SRAM market revenue ranking 1H2003
Rank Company 1H03 sales % of market 1H02 sales % change
1 Samsung $400.0 million 32.5% $365.0 million 9.6%
2 Renesas $184.6 million 15.9% $124.1 million 48.8%
3 Cypress $142.7 million 11.6% $153.9 million -7.3%
4 Toshiba $96.8 million 7.9% $74.0 million 30.8%
5 NEC $88.3 million 7.2% $64.5 million 36.8%
6 Hynix $45.0 million 3.7% $49.4 million -8.9%
7 Sony $49.8 million 4.1% $62.0 million -19.7%
8 IBM Micro $33.3 million 2.7% $113.6 million -70.7%
9 IDT $23.6 million 1.9% $27.6 million -14.5%
10 ICSI $20.0 million 1.6% $19.2 million 4.2%
11 Micron $15.5 million 1.3% $24.0 million -35.4%
12 GSI Tech $13.6 million 1.1% $20.8 million -34.6%
13 ISSI $14.6 million 1.2% $18.6 million -21.5%
Others $101.1 million 8.3% $78.8 million 28.3%
Total $1228.9 million 100% $1195.5 million 27.9%
Source: iSuppli Corp. (September 2003) |
