[피스앤칩스]Samsung Electronics and SK Hynix’s performance is on the rise – Asia Economy

Samsung and SK Hynix announced this week
Earnings outlook ‘cloudy’ due to semiconductor cold waves
DDR5 raises expectations from the memory market

editorial commentA semiconductor known as the rice of modern industry. It’s a term you hear every day, but when you try to explain it, your mouth won’t come out. I will feed you the difficult semiconductor concept easily and the general flow of the industry at Peace & Chips. You just need to put a spoon on it.

[아시아경제 김평화 기자] Finally, it’s Semiconductor Performance Week. Samsung Electronics and SK Hynix will announce last year’s performance, including the fourth quarter, on the 31st and 1st of next month, respectively. Negative growth is expected for both companies.

Samsung Electronics has already released preliminary results on the 6th, and in the fourth quarter of last year, sales were 70 trillion won, down 8.5% from the same period last year, and operating profit was 4.3 trillion won, a decrease of 69 %.

Detailed performance by business has not been disclosed, but the decline in semiconductor operating profit may outpace overall operating profit. In the stock market, there are even predictions that semiconductor operating profits fell by billions in the fourth quarter of last year. KB Securities is expected to earn 300 billion, which in this case is a 97% decrease from the same period last year (10.6 trillion was earned).

SK Hynix’s earnings are expected to turn into a deficit. SK Hynix’s sales forecast for the fourth quarter of last year, confirmed by FnGuide, a financial information company, was KRW 8,276.3 billion, down 33% from the same period last year. The forecast for operating loss is 1.1154 trillion won.

The decline in earnings for both companies began in the third quarter of last year. A cold wave in the semiconductor market due to the downturn in the global economy also affected the performance of companies. As semiconductor inventories increased in the market, price reductions were inevitable, and the profits earned by companies also decreased.

In particular, memory semiconductors, which Korean companies focus on, are relatively heavily influenced by the economy. The associated performance will inevitably be greatly reduced. According to data recently released by market researcher Gartner, global semiconductor sales increased by 1.1% last year, while memory sales fell by 10%.

It is said that the collapse of the semiconductor industry will continue until this year. Of course, the company’s performance is also difficult to show an upward trend. However, inventory may decrease in the second half of the year. A scene unfolds. This is because major memory companies such as SK Hynix and Micron in the United States are reducing semiconductor chip production.

Additional revenue generation from the memory industry is also a factor to look forward to. Noh Geun-chang, a researcher at Hyundai Motor Securities, predicted, “With the release of Intel’s Sapphire Rapids, server double data rate (DDR) 5 demand will increase from the third quarter.”

DDR5 is the latest standard for DRAM, a memory semiconductor. It is 30% more profitable than existing products. DDR5 DRAM is not yet widely used, When Sapphire Rapids, the latest server central processing unit (CPU), is released to the market, demand is said to increase sharply as it is used together. It opens up a high added value market.

If the cold wave continues, the long-term market outlook is positive. Market researcher Omdia predicted that the memory market would grow by 6.9% between 2021 and 2026, when the overall semiconductor market would grow at an average annual rate of 5.8%. In particular, the growth of NAND flash, another memory item, is said to be prominent.

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Correspondent Kim Pyeong-hwa peace@asiae.co.kr