According to IHS’ DRAM market report, with the DRAM price came to the perilously low levels, if the makers do not transition to the more efficient 3x/2x nm process technologies which are already adopted by Samsung Electronics Co. Ltd. and other leading memory suppliers, they might face great losses.
In the third quarter, Samsung’s wafer production at the 3x/2x level gets 29% of the market, which is the highest level among all major DRAM makers so far. Samsung is still being the leader in this field, and until the end of 2012, Samsung will turn nearly 80% wafer production to 3x nm or even more advanced process technologies.
The fellow South Korean competitor, Hynix Semiconductor Inc. wants to catch up with Samsung, and Hynix counts 18% of DRAM production at the same 3x/2x nm level, while although its 25 nm products are still being the early testing stage, Japan’s Elpida Memory Inc. ranked the third and takes 16 percent. Although Hynix and Elpida—the second- and third-ranked entities in revenue market share for the DRAM space—have not approached Samsung’s efficiency in migrating process nodes downward more quickly, such percentage levels suggest an effort to keep up.
While, Micro and Nanya, the current laggards will be hurry their pace to catch up at the end of the next year. At present, the main products of these two companies still depend on 42 nm process whose probably cost effective might be kept only for this year. And then, in order to stay competitive, the two companies will need to accelerate their transition to 3xnm.
Since the present DRAM prices are still low, entities, like Powerchip, still adopt 4x/5xnm electronic components processes, and according to iSuppli, production at those nodes means a decreasing likelihood of even covering cash costs. The cash cost per packaged 2Gb DDR3 die at 31nm currently stands at $0.68, but the cash cost balloons to $1.34 at 48nm. It is expected that the average selling prices for DRAM might slide even further, and in the Q4, it might be down to $1.25. So, any player who continues to produce at the 4xnm node is easy to confront disaster.
To overcome this difficulty, manufacturers need to move quickly and transition process nodes downward. However, this action might bring in some side effect that more DRAM per wafer will be produced as industry players struggle to keep up in the downward-migration race, which is likely to press the prices even more.
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