Samsung Electronics held its title as the world's largest producer of DRAM (dynamic RAM) memory chips in 2006 despite a late charge by Hynix Semiconductor, according to a study released on Thursday.

Hynix leapfrogged Qimonda, jumping into second place by posting a 31 per cent increase in DRAM bit shipments from the third to fourth quarter, while the market as a whole grew by only 14 per cent in that time, according to iSuppli.

In 2006, Samsung claimed DRAM revenues of $9.5 billion, 28 per cent of the entire $33.9 billion market, iSuppli said. Hynix followed with 16.6 per cent market share, leading Qimonda's 15.9 per cent, Micron's 11 per cent and Elpida's 10.4 per cent. All other producers were in single digits.

Hardware vendors use DRAM semiconductor memory in a vast range of products, including computers, printers, hard disk drives, mobile phones, digital cameras, televisions and game consoles. Although demand will keep growing, iSuppli says slumping prices in 2007 will take the wind out of those sails, pushing revenue down despite rising sales.

The vendors are more optimistic. Qimonda predicts that demand could rise in 2007 because of Microsoft's launch of its new Windows Vista OS, as well as other communication and consumer applications, according to the company's recent earnings report. Likewise, Samsung predicts that a strong consumer electronics market will push demand for DRAM used in 2.5G and 3G (third-generation) handsets and in game consoles.

DRAM vendors also hope to continue momentum by relying on technology advances, planning to shrink their chip architecture from 90 nanometres to 80nm and below in the short term, and to upgrade from current DDR2 design to DDR3 in coming years.

Despite its dominant position, Samsung suffered in December as one of its executives agreed to serve jail time and pay a large fine as the result of an investigation by the US Department of Justice into price-fixing practices in the industry. The plea was the fifth from a Samsung executive, and marked the 18th person from four vendors indicted since December 2003. The other companies charged were Hynix, Elpida and Infineon (which has since spun off its DRAM division as Qimonda).