The performance of the three global memory semiconductors including Samsung Electronics, SK Hynix, and Micron in the first quarter will be more consequential than expected. However, there is still a month left for the disclosure of their market business. While the total operating deficit of these three companies will approach 3 trillion won.
As per the semiconductor industry, Samsung Electronics is speculated to have lost near approx 12 trillion won in January- February of this year. These numbers after making a deficit of close to 1 trillion won in the memory business in December last year.
An industry insider said, “Since December last year, Samsung Electronics has been recording a large deficit in the memory business,” adding, “It seems that the deficit in the memory business has widened this year, resulting in a loss of close to 12 trillion won in the three months from December to February.”
Therefore, if Samsung Electronics undergo such a large deficit in the memory market such as DRAM and NAND flash. Then certainly, the companies like SK Hynix and Micron would able to avoid big losses.
Presently, SK Hynix’s consensus operating loss for the first quarter is something around 1.2 trillion won. Whereas, some experts predict that SK Hynix’s deficit will be more than its consensus.
Park Yuak, a researcher at Kiwoom Securities, predicted, “SK hynix’s deficit in the first quarter will reach 7000.1 trillion won,” adding, “The deficit will be 3.2000 trillion won in the DRAM field and 1.4000 trillion won in NAND flash, and the deficit will increase further to 1 trillion won this year.”
Micron’s operating loss is predicted to be equal to SK Hynix’s
Additionally, Micron’s operating loss is predicted to be equal to SK Hynix’s. Therefore, its operating loss in the first quarter is predicted to be 12 trillion won. While its earning declaration in late March is expected to record losses. As of now, the memory market has comprised several cycles. While it is tough to find a recession in which these three companies’ quarterly losses were nearly 3 trillion won respectively.
Also, as per market research company Trendforce, Samsung Electronics DRAM’s share in the fourth quarter of last year was 4.45%. This is an increase of nearly 1% as compared to the third quarter. Due to this reason, there’s a strong prediction that Samsung Electronics gain greater losses with regards to other companies.
At the same time, the problem occurs ahead, since as per Trendforce, DRAM prices are speculated to fall by another 1% in the first quarter of this year. And this is over here, as it continuously falls by 20% in the second quarter. Similarly, NAND flash also assumes to drop by 2% and 11% respectively, during the same tenure.
Do Hyun-woo, a researcher at NH Investment & Securities, state, “The increase in demand for AI, including ChatGPT, is only contributing to a partial demand for HPC (high-performance computing), which accounts for 5% of the total,” adding, “The decline in demand for mobile DRAM has partially eased, but the decline in demand for PCs and especially servers is intensifying.”
In addition to this, as predicted by some experts that the frequent climbing of inventory will need to be cleared to much as possible before the market can recover. At this point, the DRAM stocks are predicted to be more than 17 weeks. While it will certainly take at least six months to exhaust it.
Another official in the semiconductor industry said, “Considering the amount of DRAM inventory, it is difficult to rule out that not only this year but also next year’s business situation may be bad,” adding, “It is expected that the semiconductor cycle will shorten and demand in new industries such as artificial intelligence will be activated.”
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