South Korean chipmaker SK hynix Inc. is losing its industry presence as it struggles to create synergy with the NAND flash business it acquired from U.S. Intel Corp.

According to data from market researcher TrendForce on Thursday, NAND flash shipments grew 2.1 percent in the first quarter from the previous quarter. Overall revenue, however, fell 16.1 percent during the same period, due to a 15 percent decline in the average selling price (ASP).

SK hynix and Solidigm, the company’s NAND flash business, have been particularly hit hard by the industry-wide recession.

SK hynix’s NAND flash business posted $1.32 billion in first-quarter sales, down 24.8 percent from the previous quarter. The sales decline has resulted in the company’s market share to fall to 15.3 percent in the first quarter, down from 17 percent in the fourth quarter of last year.

U.S. Western Digital Corp. accounted for 15.2 percent of the NAND flash market, tracing closely behind SK hynix.

The Korean chipmaker has been losing its market share amid industry-wide struggles. SK hynix quickly rose to the second spot in the market with a 19.9 percent share shortly after its acquisition of Solidigm in the second quarter of 2022.

Its market share even rose to 23.2 percent in the third quarter in 2022, but aggressive production cuts following the industry slowdown, combined with a contraction across its sales network, hit the chipmaker hard, leading to the fall in market share.

On the other hand, the top two chipmakers have gained market share, keeping them safe from further struggles amid the decline in sales.

Samsung Electronics Co., the market’s top player, posted $2.93 billion in sales in the first quarter, down 15.8 percent from the previous quarter, but its market share slightly grew to 34 percent from 33.8 percent.

Then Japanese chipmaker Kioxia Holdings Corp. saw its sales fall by 5.9 percent compared to a quarter earlier but its market share rose to 21.5 percent, from 19.1 percent.

Industry insiders note that Solidigm’s struggles are severe.

SK hynix‘s U.S. subsidiary Nand Product Solutions Corp., which includes Solidigm, reported a net loss of 856 billion won ($652 million) in the first quarter, up more than five times from a year ago. The company had also posted a net loss of 3.32 trillion won last year.

TrendForce projected that the ASP of all product types will fall amid the ongoing inventory pressure. However, it noted that the “purchase intent among buyers, such as computer makers, has started to increase due to Samsung’s recent production cuts.”

By Oh Chan-jong and Chang Iou-chung

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]