Seasonal Smartphone Demand Drove Quarterly Mobile DRAM Revenue Up 18% in Q3

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Though DRAM prices continue to fall, mobile DRAM has been more resistant to price decline than other memory products. With the bit supply increasing, mobile memory accounted for 40% of the total DRAM revenue in the third quarter, and its share of the revenue is expected to keep expanding. According to DRAMeXchange, a division of TrendForce, mobile DRAM revenue increased by 18% in the third quarter compared with the second quarter. SK Hynix made the largest contribution to mobile DRAM revenue during this period, followed by Samsung and then Micron. The growth in third-quarter mobile DRAM revenue was highly related to an increase in the shipments of LPDDR4 for iPhone 6s.

“In the fourth quarter, global smartphone shipments are expected to increase 3.7% over the third quarter,” said Avril Wu, DRAMeXchange assistant vice president. “New shipments of iPhone 6s will also propel LPDDR4 shipments, significantly enlarging their share in the overall mobile DRAM shipments. Correspondingly, mobile memory’s average selling price is projected to rise and help bring up its global revenue for the final quarter of 2015. However, the average selling price of mobile DRAM will fall in the first quarter of 2016 as smartphone shipments in that period are forecast to fall over 10% quarterly.”

Mobile DRAM sees the least average price decline while its share in the total DRAM shipments keeps on growing

In the third quarter, Samsung benefitted from seasonal smartphone demand as well as from its role as the chief supplier of LPDDR4 for iPhone 6s. The memory maker’s mobile DRAM revenue amounted to US$2.586 billion, an increase of 16.5% from the previous quarter. Despite falling prices, the operating margin of the Samsung’s DRAM business did not drop and remained at 47% in the third quarter.

SK Hynix also performed well and benefitted from increased LPDDR4 shipments for the iPhone 6s as Samsung did. SK Hynix’s mobile DRAM revenue reached US$1.2 billion in the third quarter. This represented a huge quarterly increase of 30% and helped push the supplier’s market share up to 26.4%. In the technological race, SK Hynix is a half generation behind Samsung in mobile DRAM manufacturing as it produces mainly on the 25nm process. Nonetheless, the supplier is still able to turn a profit with this technology in face of falling prices.

Micron’s mobile DRAM revenue totaled US$695 million in the third quarter, a 10% increase over the prior quarter. However, the supplier’s market share contracted to 15.3%. Micron has scheduled mass production of memory products on its 20nm process over the next few quarters and is expected to ship mobile memory at the end of next year’s second quarter. By then, the ratio of LPDDR4 in Micron’s mobile DRAM shipments will also rise.