DRAM Industry Q1 Revenues Decline 21.2% QoQ
May 25, 2023 | TrendForceEstimated reading time: 2 minutes
TrendForce reports a dramatic 21.2% QoQ decline in Q1 revenues for the DRAM industry, bringing total revenue down to US$9.663 billion. This significant dip represents the third consecutive quarter where revenues have fallen. A closer look reveals that increased shipment volumes were exclusive to Micron, with other suppliers noting a decrease. The ASP fell for all three major suppliers. An enduring oversupply issue, which has led to an ongoing slump in prices, is the chief culprit behind the decline. Nevertheless, the industry expects a gradual slowing in the rate of price decline following planned production cuts. TrendForce’s Q2 forecast suggests a rise in shipments, but the ongoing price fall might limit potential revenue growth.
Each of the three major suppliers—Samsung, Micron, and SK hynix—reported a drop in quarterly revenue. Samsung saw a decline in both shipment volumes and ASP due to fewer orders for its newly launched devices, resulting in a QoQ decrease in revenue of 24.7%, amounting to about US$4.17 billion. Benefiting from its earlier financial reporting and the tail-end orders of the previous year, Micron climbed to the second position in 1Q23. Despite being the only supplier among the big three to record positive shipment growth, Micron couldn't avoid a minor 3.8% revenue decline, taking its total down to US$2.72 billion. SK hynix faced the steepest decline, with more than a 15% drop in both shipment volume and ASP, leading to a drastic 31.7% plunge in revenue, amounting to approximately USD$2.31 billion.
TrendForce's earlier prediction of the big three shifting from profitability to loss in 1Q23 due to a swift ASP decline came true. With DRAM prices continuing to fall, it's anticipated that Q2 operating profit margins will remain in the red. In response to this, all three major suppliers have started implementing production cuts, with Q2 capacity utilization rates expected to fall to 77% for Samsung, 74% for Micron, and 82% for SK hynix.
In terms of Taiwanese suppliers, Nanya faced a decline in shipments for the fourth consecutive quarter, with Q1 revenues dropping by 16.7%. Mainstream process nodes remained stagnant at 20 nm, lagging behind the big three, leading to a substantial decline in operating profit margins to -44.9%. However, there is a glimmer of hope as the replenishment demand for TV SoC inventory is anticipated to lift the Q2 utilization rate back up to 80% from 70%. Despite receiving several emergency orders for laptops and TVs in Q1, Winbond reported an 8.8% decline in revenues as prices continued to fall. Amidst falling prices and sluggish demand, PSMC experienced a 12.3% dip in its quarterly DRAM revenue. The company's financial performance is primarily tied to its own consumer DRAM products, excluding the revenue from its DRAM foundry services. However, if the foundry service revenue were to be included, the company's quarterly decline would steepen to 22.6%.
Suggested Items
Intel Announces 2024 EPIC Supplier Program Award Recipients
03/29/2024 | Intel CorporationIntel announced the recipients of the 2024 Intel EPIC Supplier Program awards, which recognize suppliers that exemplify Intel’s standard of excellence. Intel is committed to expanding global supply capacity, delivering leadership products and enabling Intel Foundry.
Q2 NAND Flash Contract Prices Expected to Rise by 13–18%, Enterprise SSDs to See Highest Increase
03/29/2024 | TrendForceTrendForce projects a strong 13–18% increase in Q2 NAND Flash contract prices, with enterprise SSDs expected to rise highest. Despite Kioxia and WDC boosting their production capacity utilization rates from Q1 this year, other suppliers have kept their production strategies conservative.
Kioxia, WD Elevate Capacity Utilization, Pushing NAND Flash Supply Growth to 10.9%
03/19/2024 | TrendForceTrendForce reports that anticipation of NAND Flash price hikes into Q2 has motivated certain suppliers to minimize losses and lower costs in hopes of returning to profitability this year.
Northrop Grumman Honors Suppliers for Excellence
03/14/2024 | Northrop GrummanNorthrop Grumman Corporation honored more than 70 suppliers for their outstanding contributions in 2023. In an annual recognition event, the companies included women-, minority- and veteran-owned small businesses as well as those operating in underdeveloped areas.
Registration Open for Electrical Wire Processing Technology Expo (EWPTE) 2024
02/28/2024 | IPCRegistration is now open for Electrical Wire Processing Technology Expo (EWPTE) an exclusive, free-of-charge* event for the electrical wire harness, wire, coil winding and cable processing industries, to be held at Baird Center May 14-16, 2024, in Milwaukee, Wis.