Samsung Electronics and Hynix Semiconductor plan to raise the proportion of its current 1GB DRAM production from 10% to 30~40% from the fourth quarter so that the product cycle of DRAM would change 6 months earlier than expected. Therefore, 1GB DRAM will become the main unit of the DRAM market from the second half of next year, a year earlier than expected.

The two companies intend to lead the market during the transition period of main DRAM unit from 512MB to 1GB in order to lead the market and maximize price-competitiveness and profitability in order to overcome the unfavorable market conditions. Taiwanese competitors are not prepared for 1GB DRAM manufacturing and other competitors in Japan, Europe and the US are still staying at 70~80 nanometer process.

A senior official of Samsung Electronics said, “We are planning to increase the proportion of 68 nanometer 1GB DRAM production to 30~40% by the end of this year. Also, in the first half of next year, 1GB DRAM production will become the main unit, accounting for more than 50% of the total manufacturing volume. At that time, the price of a 1GB DRAM would be lower than that of two 512MB DRAM.” Currently, 1GB DRAM production accounts for 10~15% of the total production volume.

A senior official of Hynix Semiconductor also said, “Out goal is to raise the current 1GB DRAM proportion from 10% to 40% by the end of this year. Our 1GB DRAM is being manufactured in the 66 nanometer process.” An industry observer said, “Hynix sees 1GB DRAM production as the turning point for the company to surpass Samsung Electronics in order to dominate the market. The short product cycle of 512MB DRAM would reduce the company’s profit. But, it sees more profits in dominating the 1GB DRAM market.”

In its DRAM market report released in the second quarter, iSuppli, a market researcher, said the proportion of 1GB DRAM production around the world will increase from 1.8% in the 1Q to 9% in the 4Q and to 29% in the 4Q of next year. The transition period of main DRAM unit was predicted as the end of next year or the first half of 2009.

By: DocMemory
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