The top memory chip makers are going through a cold phase due to the cyclical downturn in the industry. Samsung Electronics, SK Hynix and Micron, are piling on production cuts, dealing with inventory issues, saving on capital expenditures and delaying progress on advanced technologies to counter the weak memory demand.
Memory is the highest branch of the semiconductor market share, with a market space of about $160 billion in 2021, but the flash memory (NAND) market will grow at only 23.2% in 2022, which reaches the lowest growth value in nearly eight years; memory (DRAM) will grow at only 19%, and is expected to drop further to 14.1% in 2023.
In response, an economic analyst pointed out that the market oversupply has strongly driven the downward cycle, which is also the reason for the low price of memory chips. SK Hynix revealed in its third quarter earnings report that demand for DRAM and NAND products was low, with both sales and prices falling.
At the same time, analysts said the cycle was also affected by low demand, economic downturn and geopolitical tensions. Significant weakness in demand for smartphones and PCs, the two drivers that have driven memory for years, is expected to continue through 2023.
According to the report, the memory market is highly concentrated, memory market is highly concentrated. DRAM market, Samsung, Micron, SK Hynix together accounted for about 94%; NANDFlash field, Samsung, Armor Man, SK Hynix, Western Digital, Micron, Intel together accounted for about 98%.
But by the industry downward impact, the above companies appear different performance decline.
On October 27, Samsung Electronics third-quarter results showed that the division responsible for the storage business revenue of 15.23 trillion won, down 28% sequentially and 27% year-on-year; SK Hynix third-quarter revenue of 10.98 trillion won, operating profit of 1.66 trillion won, sales and operating profit fell 20.5% and 60.5%, respectively, sequentially.
Micron released its Q4 2022 results (June to August 2022) on September 29, with revenues of just $6.64 billion, down 23% sequentially and 20% year-over-year.
Editor: Huang Fei
