Semi-Conductor Industry’s New Dinamics- Good for Samsung, Bad for Micron

It is estimated that the phenomenon of ‘Bitcross’ will accelerate the restructuring in companies of the semiconductor D-RAM, because it can deepen the structure of ‘the rich get richer and the poor get poorer’.

Because of it, experts said that the originating point of ‘Bitcross’ is the time for the shift in generation. Gartner Dataquest forecasted that the product of 256 Mega will jump to 68% in the fourth quarter from 39% in the first quarter (Jan. ~ Mar. ), and so warned the end of ‘128 Mega era for D-RAM’.

▽Favorable factor for leading companies, burden for late-advancing companies 〓When the phenomenon of Bitcross occurs, the leading companies which have the high production of 256 Mega products will be damaged. However, when the cost competitiveness is considered, Bitcross becomes the big favorable factor for a long term. Leading companies which concentrate on the continuous equipment investment can increase the competitiveness through decreasing costs, but late-advancing companies has lost the competitiveness steadily through relative cost increase.

Samsung Electronics which introduced 12 Inch wafer line and 0.12㎛ processing has the strategy to increase the 256 Mega products of 60% of SD RAM productions up to 80%.

Hynix and Micron Technology have increased the production of 256 Mega products to over 50%. It is the difficult to assert appropriate investment due to the financial strains.

▽restructuring of D-RAM companies can be the catalyst? 〓 semiconductor experts forecasted that the shift of D-RAM will affect the restructuring of D-RAM companies which are suffering from the chronic oversupply.

Experts analyzed that the reopen of Hynix acquisition by Micron is the strategy which recoups the inferior competitiveness through market strengthening due to insufficient facility equipment.

Kim, Young-Jun, the analyst of Kyobo Securities said “As the shift of D-RAM has been progressed rapidly, the skeptical vision for the long-term survival of the late-advanced companies has been expanded. The Bitcross phenomenon will lead the corporate restructuring of inferior companies to give up the D-RAM business or concentrate on niche market.

This phenomenon is that the price of 2 low-capacity D-RAM (128 Mega) exceeds the price of 1 unit of double capacity (256 Mega). Instead of 128 Mega, the demand of 256 Mega increases.

Jeong-Hun Park sunshade@donga.com