Micron Technology, which posted its highest-ever quarterly results, is closing in on second-ranked SK hynix (000660) in the DRAM market. After narrowing the market share gap to 1 percentage point in the second quarter, the U.S. chipmaker kept up its rapid growth in the third quarter, intensifying competition between the two companies.
Micron held a 24% share of the DRAM market by revenue in the second quarter, ranking third in the industry, according to research firm Counterpoint Research on the 2nd. Micron lifted its share by 2 percentage points from the previous quarter, while No. 2 SK hynix slipped 4 percentage points to 25% over the same period, narrowing the gap between the two to 1 percentage point.
Analysts attribute the shift to SK hynix focusing more heavily on high-bandwidth memory (HBM) supply than its rivals in the second quarter, leaving it less exposed to the sharp price gains in conventional DRAM. Prices for conventional DRAM rose especially steeply in the second quarter, compared with HBM, dividing manufacturers' fortunes depending on their product mix. Samsung Electronics (005930), which also kept a relatively high share of conventional DRAM, maintained a commanding lead with a 38% share, while China's CXMT reached a double-digit share of 10% for the first time by targeting demand for older DRAM.
Micron is sharply expanding revenue in the third quarter, raising the pressure on SK hynix. Revenue for its fiscal fourth quarter, covering June through August and corresponding to rivals' third-quarter results, came to $54.23 billion (about 73.6 trillion won), up 30.8% from the previous quarter, when it already threatened SK hynix. That pace outstrips the third-quarter growth the market expects from SK hynix. The consensus estimate for SK hynix's third-quarter revenue is 98.2718 trillion won, a 23.9% increase from the previous quarter, according to financial data provider FnGuide.
Still, it is too early to declare a winner, since that estimate covers total revenue including businesses beyond DRAM, and the two companies' reporting periods do not fully overlap. The comparison is likely to hinge on SK hynix's third-quarter results, due shortly.
SK hynix could widen the gap with Micron again if it ramps up supply of high-margin HBM4 in the second half, timed to the launch of Nvidia's new Vera Rubin chip, while also increasing conventional DRAM output. On a conference call for second-quarter results in July, the company said bit growth would exceed first-half levels as HBM4 volumes expand in earnest in the second half and shipments of conventional DRAM based on sixth-generation 10-nanometer-class (1c) technology increase.
