Korea’s DRAM makers face double-digit declines in Q1 - Mobile World Live

Korea’s DRAM makers face double-digit declines in Q1

19 MAY 2016
chip

South Korea’s major memory chip manufacturers, Samsung and SK Hynix, reported sharp declines in sales of DRAM chips in Q1 due to an over supply and falling prices as demand for smartphones remained weak.

According to industry tracker DRAMeXchange, global DRAM revenue in Q1 fell 16.6 per cent to $8.56 billion.

The tracker noted that while demand recovered slightly due to restocking smartphone inventories in China, downward revisions in iPhone and notebook shipment estimates exacerbated the DRAM oversupply problem, Yonhap news agency reported.

Q1 is traditionally a slow period for the industry with weak demand for memory.

Samsung, the country’s largest chip maker, saw sales of DRAM chips decline nearly 17 per cent to $3.97 billion, while SK Hynix reported a 19 per cent decline to $2.32 billion in the three-month period, Yonhap said.

Despite the declines, both firms’ share of the DRAM market remained fairly stable at 46 per cent for Samsung and 28 per cent for SK Hynix.

Smartphone weakness
The impact of slowing smartphone sales has been felt across the supply chain, with contract manufacturers hit particularly hard. Hon Hai Precision’s OEM handset unit FIH Mobile reported a net loss of $3.85 million in Q1, with revenue falling 46 per cent to $1.08 billion, DigiTimes said.

Hong Kong-listed FIH issued a profit warning earlier in the month, forecasting an 85-90 per cent drop in earnings for the first half of the year as smartphone demand continues to weaken.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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