Samsung: King Of The DRAM

The market to supply dynamic random access memory to computer original equipment manfacturers (OEMs) is quickly becoming a one-horse race, according to one report.

The report, from research firm iSuppli Inc., says Samsung Electronics was the one company of the top five DRAM suppliers to achieve revenue growth in the previous quarter. This allowed the company to maintain its stronghold on the market.

Samsung sold $4.4 billion worth of DRAM in the third quarter, which was a 14.3 percent increase from $3.8 billion in the second quarter. The company's share of the market increased from 35.4 percent in the previous quarter to 40.7 percent. The next four in the industry, Hynix, Elpida, Micron and Nanya, all lost revenue and share.

Samsung has been vocal about its desire to expand its DRAM market share to as high as 50 percent. The third-quarter results show Samsung has put its money where its mouth is. By investing heavily in expanding production and advancing its manufacturing technology, the company has been able to cut pricing and to eat into the market share of its competitors, Mike Howard, senior analyst for iSuppli, said in a statement.

Howard says the growth for Samsung will continue into the next year. The only limitations on Samsung's growth will be how much share its largest PC OEM customers will allow it to take, how long the company can continue to cut prices and how much it can increase its dominance before government regulators raise anti-competitive concerns, Howard said.

Meanwhile, 2011 could be an even more difficult year for Samsung's competitors, Howard says. Tey are going to have to advance their manufacturing processes as quickly as Samsung, or be left behind. He also says some companies in the DRAM market may face consolidation.