Global DRAM market revenue hit 2008 low in the fourth quarter

In context: The latest report from market intelligence provider TrendForce further describes the dire predicament the global DRAM market is facing by the end of 2022. According to the company’s research, global DRAM revenue has declined of 32.5 percent quarter on quarter to $ 12.3 billion in Q4. That’s down from $18.19 billion in the third quarter and nearly rivals the record QoQ decline of 36 percent from the last quarter of 2008 during the global recession.

TrendForce said that the main reason for the decrease in revenue was the decrease in the average selling price caused by a rapid accumulation of inventory in Q3 2022 due to the freeze in demand. Afraid of losing market share, suppliers negotiated less favorable contracts at lower prices to move inventory.

The top three DRAM manufacturers – Samsung, SK Hynix and Micron – saw quarter-on-quarter revenue declines of 25.1 percent, 35.2 percent and 41.2 percent, respectively. In fact, all of the top six DRAM makers experienced significant QoQ revenue declines.

Samsung was the most aggressive when it came to cutting prices and thus managed to increase its market share from 40.7 percent in Q3 to 45.1 percent in the last quarter of 2022. SK Hynix and Micron saw their market share decreased slightly in Q4 from Q3, from 28.8 percent to 27.7 percent for SK Hynix and from 26.4 percent to 23 percent for Micron.

TrendForce says server DRAM saw the sharpest price declines in Q4, with contract prices for DDR4 and DDR5 products sliding 23 percent to 28 percent and 30 percent to 35 percent, respectively.

Micron executives in an analyst call on Thursday announced plans to accelerate layoffs that will reduce its workforce by 15 percent this year. The company will also write down inventory in the latest fiscal quarter and scale back chip production to counter the weak market. Micron shares fell more than three percent on the news, now trading at $55.18.

Image credit: Liam Briese

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