July 17, 2003 5:25 PM PDT

Micron gains on Samsung in memory market

Micron Technology gained ground against memory chip rival Samsung Electronics in the first half of this year, but Samsung is poised to finish 2003 strongly, according to a new study.

Micron's share of revenue in the dynamic random access memory (DRAM) market rose to 21.2 percent in the first half of 2003 from 18.5 percent in 2002, according to a study from market research firm Semico Research. Samsung's market share for the same periods slipped to 29.1 percent from 31.7 percent.

But Semico analyst Matthew Godfrey said Samsung's market share should jump above 36 percent by the end of this year amid interest in higher-speed, double data rate (DDR) memory chips with bandwidths of 333 and 400 megabits per second.

"We believe Samsung is uniquely positioned to support the surge in demand for DDR333/400 expected in (the second half of the year) and will take share from less able competitors," Godfrey said in a statement.

DRAM chips are used in computers, communications devices and consumer electronic products. The vast majority of the chips wind up in PCs, server computers and workstations. Total spending on DRAM in the first half of this year was $7.1 billion, according to Semico. Semico expects DRAM spending for all of 2003 to hit $17.4 billion.

Prices for DDR DRAM memory chips are on the rise, but not for long, Godfrey said. The average price for a 256-megabit chip in the second quarter was about $4.30. That should climb to roughly $4.50 in the third quarter thanks to low inventories and the push to higher-speed chips, Godfrey said. But the price should slide back to about $4.25 in the fourth quarter, he added, as greater volumes of higher-speed chips become available.

Another supplier gaining market share in the first half of the year was Infineon Technologies. Infineon's portion of DRAM revenue climbed from 12.9 percent in 2002 to 18.5 percent in the first half of 2003, according to Semico.

"The company has clearly broken away and is comfortably in the third position," Godfrey said. "We expect that a strong (second half of 2003) could move Infineon even closer to Micron in market share."

 

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