Chicago (IL) – By now we all know that the economy isn’t in a particular upbeat mood and it is no secret that memory makers have been taking hits for quite some time now. Recessional trends around the globe have made matters worse and are causing dramatic revenue drops for chip manufacturers. According to iSuppli, the top 10 DRAM makers recorded revenue drops of up to 75% in the fourth quarter of 2008. Even Samsung, which controls 30% of the market, isn’t immune to this situation and lost almost 40%.  

iSuppli estimates that overall DRAM revenue dropped by 37.9% from $6.69 billion in Q3 2008 to $4.16 billion in Q4. There was no top 10 DRAM manufacturer that was able to post revenue gain; in fact, all of them are estimated to have lost revenue in the double-digit range. The best performer in the ranking was Micron, the world’s fourth largest DRAM maker, with a drop of 16.4%. The worst was Powerchip #8), which recorded a drop of 74.5%.

Samsung, the leading DRAM manufacturer, lost 38.2%, from $2.02 billion to $1.25 billion. Hynix follows with a drop of 32.7% and Elpida with 39.1%. The three largest DRAM makers saw their sales drop by more than $1.5 billion from Q3 to Q4 2008.

For the entire year of 2008, revenue was $23.6 billion, coming in below iSuppli’s preliminary estimate of $25 billion.
 “With its dominant market share, huge capital investments and industry-leading costs, Samsung generally has been able to outperform the overall DRAM industry - in both good times and bad,” said Nam Hyung Kim, chief analyst for iSuppli. “No wonder the company still holds the best DRAM profit margin in the industry. However, amid the recent global economic turmoil, Samsung now is no longer immune and its losses are expected to continue this quarter.”

iSuppli said that DRAM suppliers have been selling their products at prices below their cash costs since the fourth quarter of 2007. This situation did not improve in the fourth quarter as dwindling demand further exacerbated the ASP decline. The industry’s operating profit margin fell to negative 65% and iSuppli believes the total operating losses reached $2.6 billion in the fourth quarter and $7 billion in 2008.