Memory prices fell more than expected, when Q1 revenue of Nanya, the fourth largest memory manufacturer, plummeted by 40%.

Since Q4 of 2018, DRAM memory chip prices have fallen for two quarters, that is, from Q4 last year to Q1 this year. Prices of Q4 last year fell by about 10%, while that of Q1 this year dropped by more than 20%, even up to 30%. Memory prices fell sharply in Q1, leading to the performance of memory manufacturers greatly affected. In addition to Micron and Samsung, Nanya, the fourth largest memory manufacturer, also suffered a serious impact, as its revenue in Q1 quarter was only $363.8 million, down 39.5% year-on-year.

After Micron acquired Inotera, Nanya became the fourth largest memory chip brand in the world. However, its DRAM memory particles are most commonly found in SSD cache, as well as some OEM markets. Such relatively low-end positioning is related to limited technical level of Nanya. The three major manufacturers achieved mass production of 20nm DRAM chips in 2017, and have turned to 1X or even 1Ynm technology at present, but Nanya, whose 20nm chips accounts for a small part, mainly depends on 30nm memory. It is expected that production of 20nm chips will exceed that of 30nm chips after Q2 this year.

 
Although Nanya’s global share in DRAM market is only about 3%, price reduction still has a great impact on its technology revenue and profitability. Due to more working days, its revenue of $119 million in March increased by 9.5% compared with that in February, however, it plunged by 44.7% in March last year.
In March this year, the average price of DRAM memory decreased by 4 to 6%, while the bits shipment increased by 14 to 16%. Therefore, the trade-off between the two made total revenue grow. Unfortunately, the cumulative revenue from January to March was not so good, for combined revenue was only $363.8 million, down 39.5% year-on-year.
Compared with combined revenue of $501 million in Q4 last year, Q1 revenue this year in Nanya still fell by 27%. Apart from bits shipment, the main reason is a sharp drop in the average price of ASP. It is estimated that its average price of ASP will fall by more than 20%.
For many memory manufacturers, the good market from 2017 to 2018 is gone. Industry is still worried about memory prospect this year. They think even though memory price dropped sharply from Q4 of 2018 to Q1 of 2019, the market demand of smartphone and data center has not recovered much. It’s expected that this bad situation will exit until Q3 this year. That is to say, memory prices will continue to fall in the next six months!