DDR prices on the rise - Isuppli

El Segundo (CA) - More demand for DDR memory has resulted in a steep increase in memory prices and a surge in DRAM revenues for manufacturers. Market research firm Isuppli expected a 4.4% increase in sales over the first quarter of this year and now reports that memory companies were able to boost their DRAM revenues by 14.3%.

Worldwide DRAM revenues rose to $7.5 billion in the second quarter, up from $6.6 billion the first quarter or up an impressive 31.2% over the second quarter of 2005. According to Isuppli, many suppliers are currently ramping down their production of DDR in favor of the new mainstream DDR2, which resulted in tight DDR supplies and an increase in prices over the quarter. DDR2 declined during the quarter as availability increased, the firm said.

"Along with rising prices, tighter supplies and lower production, the DRAM market’s strong performance in the second quarter was fueled by better-than-expected demand," said Nam Hyung Kim, principal analyst for Isuppli. "PC core-logic chipset suppliers in the second quarter aggressively promoted products that supported DDR, boosting demand for the memory just as DRAM suppliers were phasing out production of the part."

Samsung maintained its position as the world’s largest memory manufacturer with year-over-year growth of 21.8% and sales that now stand at $2.1 billion for a market share of 28.4%. Qimonda, created from the former DRAM unit of Infineon, saw its revenues jump 55.8% jump to $1.2 billion in the same time frame. The German company kept the second rank Infineon conquered in Q1 and now holds 16.1% market share. Hynix, Micron and Elpida follow with market shares of 15.5%, 11.4% and 10.0%, respectively.

Micron was the only top-5 memory manufacturer that saw its revenues decline sequentially : According to Isuppli, the firm’s DRAM sales dropped 3.6% from $886 million to $854 million.

Kim believes that DRAM manufacturer will be able to build on their Q2 success in the coming three months : "DRAM makers that are savoring their second-quarter success will have more reason for celebration during the third quarter ; Isuppli predicts the DRAM market’s strong expansion will continue," Kim said. "With the back-to-school and Christmas seasons soon to arrive, more good things are ahead for DRAM suppliers."