DOW JONES NEWSWIRES
Micron Technology Inc. (MU) vaulted back into third place in the
world rankings last quarter in amount of dynamic random-access
memory sold, marking a turnaround for the struggling company,
according to iSuppli Corp.
Nonetheless, DRAM sales globally continued to slump, falling 20%
from the fourth quarter and 44% from a year earlier to $3.3
billion. DRAM, used mainly in computers, has been hurt by an
overcapacity that has kept Micron in the red for the past two years
and threatened the futures of numerous Asian companies.
Micron boosted its first-quarter market share of global DRAM
sales to 14.6%, versus 13.8% in the fourth quarter and 11.3% a year
earlier. Micron surpassed Japan's Elpida Memory Inc. (6665.TO) to
become No. 3.
ISuppli analyst Nam Hyung Kim said Micron's resurgence could
trigger "a DRAM market share war which would drive prices down and
adversely impact industry profitability in the future." A price war
may be the last thing the industry needs as it is still dealing,
until recently, with slumping prices for memory products.
Average selling price per megabyte fell 8% in the first quarter,
while shipments dropped 13% from the fourth quarter. But shipments
were up 10% from a year earlier. ISuppli said more production cuts
are necessary to "accelerate market recovery" during the
recession.
Micron had long been one of the industry leaders in the market
for DRAM, being a solid No. 2 behind South Korea's Samsung
Electronics Co. (SSNHY) until 2003. But Micron's market share
eroded amid efforts to diversify beyond DRAM and its tardiness in
investing in the latest products. South Korea's Hynix Semiconductor
Inc. (000660.SE) is now No. 2.
The market share for Samsung and Hynix was 34.3% and 21.6%,
respectively, in the first quarter, both also raising their portion
of the industry from the fourth quarter.
Shares of Micron recently fell 1.7% to $4.58.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com