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Large memory chip factories collectively "overwinter"

Update time : 2022-11-05 12:12:36

The leading manufacturers of memory chips are working hard to overcome the cold winter. Samsung Electronics, SK Hynix and Micron are reducing production, coping with inventory problems, saving capital expenditure, and delaying the progress of advanced technology to cope with the weak demand for memory. "We are in a period of declining profitability". On October 27, Samsung Electronics told investors at the third quarter financial report meeting that, in addition, the company's inventory increased rapidly in the third quarter.
Memory is the highest branch of the semiconductor market, with a market space of about 160 billion dollars in 2021. It can also be seen everywhere in electronic products. It is a standardized product that has developed very mature in the international market. The industry has obvious periodicity with changes in inventory, demand, and capacity. The production and profitability of manufacturers change dramatically with the cyclical fluctuations of the industry.
According to the research of TrendForce Jibang Consulting, the growth rate of the NAND market in 2022 will be only 23.2%, which is the lowest growth rate in recent 8 years; The growth rate of memory (DRAM) is only 19%, and is expected to further decline to 14.1% in 2023.
Jeffrey Mathews, senior analyst of mobile phone component technology services at Strategy Analytics, told reporters that the market oversupply has strongly driven the downward cycle, which is also the main reason for the low prices of DRAM and NAND. In 2021, manufacturers will be optimistic about production expansion. NAND and DRAM will still be in short supply. As the demand side starts to decline in 2022, the market will become oversupply. Another SK Hynix said in its third quarter financial report that the demand for DRAM and NAND products was sluggish, and both sales and prices declined.
Sravan Kundojjala, director of mobile phone component technical services of Strategy Analytics, told reporters that the last recession occurred in 2019, when the revenue and capital expenditure of all memory plants declined significantly, and the weak market lasted two quarters before bottoming out. There are some similarities between 2022 and 2019, but this time the adjustment seems to be more drastic.
Jeffrey Mathews said that this cycle was also affected by low demand, economic downturn and geopolitical tensions. The demand for smartphones and PCs, the two main drivers of memory for many years, is significantly weak and is expected to last until 2023.
Samsung Electronics said that for mobile devices, demand is likely to remain weak and slow in the first half of next year, and consumer confidence will remain low under the influence of seasonal weakness. For PC, the inventory accumulated due to low sales will be exhausted in the first half of next year, and it is likely to see a substantial recovery in demand. The company will continue to focus on whether the macro-economy can stabilize in the second half of next year and the signs of industrial recovery.
Sravan Kundojjala said that data center, automobile, industry, artificial intelligence and network fields provide memory providers with higher future growth. Micron, SK Hynix and Samsung Electronics all mentioned the emergence of some new drivers in the third quarter's financial reports: data centers and servers will become the next strong driving force in the memory market.

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