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Korean Media: Samsung, SK hynix Q1 Chip Business may Lose Billions of Dollars

Update time : 2023-03-22 10:25:12

According to the Korea Herald, its inventories reached an all-time high of 52.2 trillion won ($39.9 billion) as of the fourth quarter of last year, compared with 41.4 trillion won the year before, according to regulatory filings filed by Samsung with the Financial Supervisory Authority's Electronic Disclosure Commission DART.
The data shows that the company's chip business unit accounted for the largest share of total revenue, which was 29.1 trillion won in 2022, an increase of nearly 12.6 trillion won over the same period in 2021.
Samsung Electronics also made a pessimistic forecast for its chip business this year at its recent shareholder meeting, but said it would continue to invest to ensure clean rooms and technological advances in an effort to "turn the crisis into safety".
According to documents filed with regulators by SK Hynix, another South Korean storage maker, its inventories rose about 75 percent year-on-year to 15.7 trillion won ($12 billion) during the said period. The company, which focuses on DRAM and NAND flash memory chips, accounts for more than 90% of its revenue, so it has been hit harder in a downturn market environment.
Market watchers say the price of PC DRAM and NAND memory chips is getting closer to cost. KB Securities forecasts that the price of DRAM and NAND chips will fall further by 19% and 18%, respectively, between January and March.
According to FnGuide, Samsung and SK Hynix's chip business is expected to lose money in the first quarter of 2023 amid falling chip prices and high inventories, with Samsung Semiconductor's operating loss estimated at 1.91 to 4.47 trillion won (about 1.46 billion to 3.4 billion US dollars) compared to SK Hynix's 3.11 trillion won (about 2.37 billion US dollars).
According to the latest report released by market research institute TrendForce last week, in the first quarter of 2023, NAND Flash industry revenue will still decrease by 8.1% quarter-on-quarter. However, major suppliers such as Kioxia, Micron, Western Digital (WD), and SK Hynix have successively reduced production, which has helped alleviate the current oversupply situation and led to the average price decline of NAND Flash to 10%-15%.

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