Winbond, Qimonda insolvency administrator in product transfer and technology licensing agreement for graphic DRAM

TAIPEI, TAIWAN: Winbond Electronics Corp. announced entering into a license and sale and purchase agreement regarding Graphics Double Data Rate (GDDR), a 5th addendum to the know how transfer and license agreement, and a settlement agreement for insolvency proceedings with the insolvency administrator of Qimonda AG.

Under the agreements, Winbond acquires licenses under patents, know how and software from Qimonda to design, develop, manufacture and sell graphic DRAM products; and the parties agree to extend the licensing scope under the existing license agreement.

Both parties reached agreement on their respective claims available under the Qimonda insolvency proceedings.

As one of the leading supplier of specialty memory products for applications in Information Technology Equipments, Consumer Electronics, Cellular Handsets, the successful acquisition of Qimonda’s GDDR-related products and technologies will enable Winbond to create new business opportunities in the blooming desktop, notebook and game console markets.

As a result of the new addition of GDDR business, Winbond will accelerate delivery of a full portfolio of specialty memory products and further expand its core business and product advantages.

Global DRAM revenue rises 27.1 percent in 2Q09

TAIPEI, TAIWAN: According to DRAMeXchange, with the production cut effect in DRAM contract price, PC system vendors continue to replenish their DRAM inventory under the low pricing status and resulted in the 23 percent growth contract price in 2Q09.

Given the tight supply, spot price also hikes that DDR2 1Gb 667MHz chip spot price once reached $1.27 in May and it was anticipated to reach $1.5 by the quarter end. However, it is said that a certain DRAM vendor released the low price chip to spot market that trigger the price fallen to the rage of US$1.05~US$1.19. Average price for DDR2 1Gb 667 MHz rose 27 percent to $1.12 in 2Q09.

The 2Q09 DRAM revenue rose about 10 percent~50 percent given the 23 percent growth contract price and 27 percent growth spot price. Samsung and Elpida have outperformed the market and increase 3 percent to their market share. Compared with the overall industry revenue in 1Q09, DRAM revenue for 2Q09 rose 27.1 percent to US$4,043M in 2Q09.

Global own brand revenue ranking for DRAM vendors
According to DRAMeXchange, 2Q09 DRAM revenue increased 27.1 percent. Samsung continued its unchallenged leadership in the DRAM industry with $1,179M DRAM revenue in 2Q09 while its market share has climbed 2.8 percent to 29.2 percent given the upward pricing trend in contract price, technology migration and raise DDR3 portion.

In 2Q09, Hynix's DRAM sales rose 31.5 percent to $928M given the 20 percent average price growth, 10 percent quarterly bit growth and dropping unit cost. Currently, Hynix ranks at the 2nd place and its market share has increased 0.7 percent to 22.9 percent.

Elpida recorded the dramatically 50.1 percent sales increase and strengthened its 3rd market leading position to surpass Micron given the 27 percent ASP growth and 12 percent bit growth.

For the different accounting period (2Q for Micron is March, April and May) it applied for the accounting periods, contract price still decline 2 percent compared with last periods (Dec., Jan. and Feb.).

According to DRAMeXchange, DDR2 1Gb 667MHz contract price was merely $0.88 in March while the contract price increased to $1.16 in June that the revenue upward pattern is less than other vendors. Therefore, Micron would grab 4th place in the ranking while its market share has declined to 13.6 percent in 2Q09 from 15.2 percent in 1Q09.

As for the Taiwanese vendors, Nanya ranks at the 5th position along with $230M DRAM revenue and 34.5 percent QoQ given the upward pricing trend in both spot market and contract market, and peaking utilization rate of outsourcing partner-Inotera.

Benefited from the 27 percent boosting spot price and 42 percent utilization rate from 25 percent, PSC shows the amazing 38.1 percent revenue growth in 2Q09 and its market share has slightly increased.

Winbond announced its 2Q09 DRAM revenue at $80m with merely 8.6 percent QoQ. The market share has declined to 2 percent since growth momentum is comparably weaker than the market. ProMOS also demonstrates 20.9 percent QoQ revenue pattern with the upward pricing trend as well.

Fig. 1: 2Q09 WW DRAM revenue ranking, by own brand DRAM revenue
(Company revenue includes outsourced portion and excludes the sub-manufacturing revenue)Source: DRAMeXchange, Aug. 2009

*Qimonda did not announce any financial results in 2Q09 under the stage of bankruptcy.; Unit: Million USD

Note:
Fig. 1: For Samsung 2Q DRAM revenue , we approximately derived the resulted by deducting LSI revenue from semiconductor based on the assumption that DRAM revenue accounts for 48.3 percent in memory sectors and 2Q09 average exchange rate is $1 against KRW$1,283. We apply this estimation to other vendors by indicating 71 percent for Hynix total revenue, 49.8 percent for Micron, 89 percent for PSC, 90 percent for ProMOS, 94 percent for Nanya and 80 percent for Winbond under the following exchange rate: US$1 against NT$33.09, US$1 against JPY$97.41.

Own brand market share of global DRAM industry (By country)
The Korean vendors share rose 3.5 percent to 53.4 percent compared with 1Q09 and their leader position remained unchallenged in 2Q09.

Shares from the Taiwanese vendors slightly rose to 13.8 percent in 2Q09 from 13.5 percent in 1Q09. The rest of market share is occupied by Japanese vendors(18.9 percent) and American vendors (13.9 percent), as per Fig. 2.

Fig. 2 The market share of own brand DRAM revenue, by countrySource: DRAMeXchange, Aug. 2009

Q109 revenue of global DRAM industry drops 22.3pc

TAIPEI, TAIWAN: According to DRAMeXchange, as the DDR2 1Gb contract quarterly average price dropped around 25 percent in Q109, the Q109 DRAM revenue decreased 22.3 percent QoQ.

Despite the declining contract price, Samsung and Hynix output cut down by 7.7 percent and 8.6 percent, and revenue shrunk by 16.1 percent and 16.3 percent, respectively. Samsung and Hynix proved a market share growth (26.5 percent and 22.3 percent). Samsung still ranks No. 1, followed by Hynix, resulting from the outperformed operation in first quarter.

For the different accounting periods (Q1 for Micron is Dec. Jan. and Feb.), Micron demonstrated the greater market share drop to 15.2 percent from 16.9 percent in Q4 with 35 percent contract price decline in last period (Q4 for Micron is Sep., Oct. and Nov.).

In March, Elpida started to receive all output production from Rexchip with the OEM shipment termination from PSC and revised capacity cut from Japan facility, the total production has descended in Q1. The Q1 revenue is down 24.5 % QoQ compared with Q408.

Qimonda filed bankruptcy in corporate restructuring process in Q1. The termination of OEM outsourcing from Inotera and Winbond and shutting down the US facility has resulted in the huge market share drop. Market share in Q1 is merely 4.7 percent.

Taiwan vendors
As for Taiwanese vendors, PSC announced $115 million in Q109 with -32 percent QoQ. Instead of contract manufacturing for Elpida, the capacity was used for own brand products. Thus, the own brand market share suprisingly grew to 17.4 percent.

Winbond announced $92 million in Q1 with -20% QoQ. Despite the revenue decline, Winbond's own brand market share increased 9.6 percent because of the output translation to own brand products since Qimonda filed bankruptcy.

With the contract price decline, Nanya's revenue merely shrunk 3.7 percent QoQ due to the raising portion in spot market and effect of two-weeks-degree inventory clearance. Due to the Qimonda's bankruptcy and revenue declining 55 percent in Q1, and Nanya jumped to No. 5 place in terms of brand-owned revenues. (Figure 1).

Fig. 1 1Q09 WW top 10 DRAM revenue ranking, by own brand DRAM revenue
(Company revenue includes outsourced portion and excludes the sub-manufacturing revenue)Unit: Million US dollars
Source: DRAMeXchange, May. 2009

Korean vendors
Korean vendors accounts for 48.8 percent in terms of DRAM chip production market share and own brand revenue are consistent with production revenue now since Hynix stopped outsourcing from financial struggling ProMos in Q1. Taiwanese vendors used to have larger portion of OEM and this situation has changed dramatically in Q1.

Except for ProMos' case, PSC stopped OEM shipment to Elpida while Winbond and Inotera stopped the OEM shipment due to the Qimonda bankruptcy. The market share has dropped to 19.2 percent from 23.2 percent because of the capacity cut. Micron's share slightly decreased to 15.3 percent, while Elpida's increased to 12.1 percent (Figure-2 and Figure-3)

Fig. 2 1Q09 WW top 10 DRAM revenue ranking, by DRAM chip production revenue
(Company revenue includes sub-manufacturing revenue and excludes the outsourced portion)Unit: Million USD
Source: DRAMeXchange, May. 2009

Market share of DRAM chip production revenueSource: DRAMeXchange, May. 2009.

For the global own brand, the Korean vendors' share accounts for 50.1 percent (excluding others) and its leadership position remained unchallenged in Q1. Taiwanese vendors' share slightly increased to 13.6 percent from 11.8 percent due to the production adjustment by PSC, Nanya and Winbond.

The remaining market shares are occupied by Japanese vendors (15.8 percent) and American vendors (15.7 percent).

Market share of own brand DRAM revenueSource: DRAMeXchange, May. 2009.

Note:
Figure 1:
** The revenue ranking by DRAM vendor own brand: The revenue in the table is using the results which were announced by the DRAM vendors and deduct the non-DRAM business revenue, then converted the number into USD basis with the average 1Q foreign exchange rate. This table is based on the vendor brand revenue basis.

** for Samsung Q1 DRAM revenue, DRAMeXChange approximatively derived the result by deducting LSI revenue from semiconductor based on the assumption that DRAM accounts for 48 percent in memory sectors and Q1 average exchange rate is USD KRW/1:1414. We apply this estimation to other vendors by indicating 76 percent for Hynix's total revenue, 79 percent for PSC, 90 percent for ProMos, 94 percent for Nanya and 80 percent for Winbond under the following exchange rate : USD to NTD/1:33.97, USD to JPY/1:93.63, USD to EUR/1:0.767.

Figure-2:
** Based on the fab manufacturing basis, the revenue is calculated and ranked by the total chip production revenue of the vendor’s fabs. Thus, the revenues of pure manufacturing vendors such as Rexchip and Inotera were independently listed. The Rexchip portion is excluded from the revenue of Elpida, the Inotera portion is excluded from the revenue of Nanya Technology. The reason we post the second table is because of the outsourcing percentage varied in Q109 and this effect will impact on Taiwanese vendor's revenue and market share ranking.