Summary

DRAM vendors must consolidate.  This is driven by basic economics.  The consolidation will result in fewer vendors, starting with the elimination of those at the bottom of the market share ranking.  Suppliers Samsung, Hynix, Micron, Elpida, Powerchip, ProMos, Nanya, Infineon, and others will be impacted.

Analysis

There is a basic market mechanism that dictates how a company can continue to compete in the DRAM market.  It stems from the relationship between minimum revenue levels and the cost of a state-of-the-art manufacturing plant.  This is true of any undifferentiated semiconductor market.  A new Brief: "Why DRAM Vendors MUST Consolidate" spells this out in detail.  The Brief's abstract can be found at www.Objective-Analysis.com/Reports. Simply put, DRAM vendors whose annual revenues today are below $2.5 billion will be unable to continue to compete.  This base level continues to rise, and will force other vendors out of the market over time.

Jim Handy consults with leading institutions through GLG

Jim Handy, Director

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Director, Objective Analysis

 
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