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【Market View】TrendForce: New Micron Group’s Market Share Surpasses SK Hynix, Nearly on Par with Samsung

Published Jul.31 2013,14:56 PM (GMT+8)

TrendForce: New Micron Group’s Market Share Surpasses SK Hynix, Nearly on Par with Samsung

According to DRAMeXchange, a research division of TrendForce, Micron is expected to announce its completed merger with Elpida –along with its subsidiary company, Rexchip— during the beginning of August. Following the finalization of the merger, the new Micron group’s DRAM wafer volume will reach up to 350K per month, which is significantly higher than SK Hynix’s 270K and close to Samsung’s 360K. Micron will be expected to make further adjustments to its DRAM capacity as well as main product lines throughout its consolidation efforts. Major changes in the industry, along with the supply chain, can be expected in the subsequent periods to come.

In 1Q13, neither Micron’s nor Elpida’s individual DRAM market shares—13.0% and 13.8%, respectively—have been close to the shares possessed by SK Hynix, which was 26.5% at the time. In combining the two companies' strengths, the new Micron group would manage to close the gap against SK Hynix, and in turn establish itself as the largest branded memory manufacturer behind Samsung. Micron, it is predicted, would also be able to get various benefits out of the Mobile DRAM market, where its initial market share was only 2.7% (compared to Elpida’s 18.5% and SK Hynix’s 21.7% in the same period). Following the merger, Micron is set to combine its NAND Flash manufacturing technology with Elpida’s expertise within the field of mobile DRAM, and this could in effect bolster its position within the eMCP/MCP market significantly. With the DRAM market turning into an oligopoly, the entire industry has a good shot of returning to its once healthy and prosperous state.

New Micron Group to Concentrate Main Production in Asia, Take Advantage of Vertical Integration

In the periods following its merger finalization, the newly formed Micron group will be able to combine production capacities from Taiwan, North America, and Japan, organize duties more effectively amongst its various divisions, and become one of the three largest DRAM manufacturers in the industry –next to SK Hynix and Samsung. Seeing as how Micron’s Singapore Tech plant is beginning to allocate capacity from DRAM products to NAND Flash, there will unlikely be a lot of specialty DRAM left for the future. The Tech plant is expected to become Micron’s major NAND Flash production facility, whereas the plants in Taiwan and Japan will each be focused on manufacturing DRAM-related components. 

Elpida’s Hiroshima plant currently produces up to 100K wafers on a monthly basis. Of these, about 90% will be used for mobile DRAM in order to satisfy customer demands. Micron’s current plan is to use Elpida’s expertise in DRAM development and to establish a critical DRAM research department within the Hiroshima plant. In Taiwan, both Rexchip and Inotera will serve as Micron’s crucial PC DRAM production centers, given that they are able to produce a combined total of at least 200K wafers. Rexchip is known to have switched from concentrating on only PC DRAM to manufacturing both PC DRAM and mobile DRAM. Inotera, on the other hand, has placed a good degree of emphasis on PC DRAM and server DRAM, and, upon mastering the necessary learning curve, will likely begin increasing the wafers intended for mobile DRAM.

Looking at new Micron group’s future business strategy, it appears that since most of the production will be taking place in Asia, more and more business centers will be heading towards this region once the opportunity arises. This will facilitate the implementation of major manufacturing developments as well as critical adjustments. Further, with Micron getting its hands on Elpdia’s mobile DRAM technology, and with its existing advantages in the field of NAND Flash production, the US based company will likely begin releasing its own line of eMCP/MCP products, and, with the help of its vertically integrated status, allow itself to seize the smartphone market during the peak of its maturity. With the cloud computing field rapidly expanding, the server market will also be of great importance; Micron will be able to benefit a lot in this area--especially in terms of furthering its market share--thanks to its existing relationship with US-based server DRAM manufacturers. In the future, the US chip maker will continue to raise its mobile DRAM and server DRAM production, integrate its technological processes with those of Elpdia, and shift its focus towards the more profitable and stable product lines. The new Micron group can easily become one of the biggest mainstream memory suppliers within the industry.