Micron Technology, which is leading the memory semiconductor market along with Samsung Electronics and SK Hynix, announced ‘surprising results’, raising expectations that a boom in memory semiconductors will blow.
As Micron offers an optimistic outlook for the memory semiconductor industry based on solid data center demand, it is expected to have a positive impact on Samsung Electronics and SK Hynix stock prices.
On the 29th (local time), US semiconductor manufacturer Micron announced earnings that exceeded market expectations after the close of the regular market. As of the US fiscal year (FY), for the three months ending on the 3rd, the sales for the second quarter of this year were $7.786 billion, surpassing the market estimate of $7.558 billion. Operating profit and net profit also recorded $2.75 billion and $2.444 billion, respectively, beating the market expectations. Earnings per share (EPS) were also 8.1% higher than expected.
Micron emphasized that the DRAM and NAND flash markets are making good business conditions this year. Although the actual information technology (IT) industry is the off-season, DRAM supply (B/G) increased and NAND flash supply remained at the level of the previous quarter. The average selling price (ASP) of NAND flash has risen due to the recent damage to the global supply chain due to a semiconductor production line accident in Kioxia, Japan. Micron’s position is that “there is no significant impact on production” about the Chinese blockade and geopolitical risks from Russia and Ukraine. As it is a short-term issue, it is expected that the decline in semiconductor demand will be sufficiently recoverable in the future. Micron, which rose 2.74% in the regular market, rose another 4% in the after-hours trading (after-hours trading) after the earnings were announced.
Seo Seung-yeon, a researcher at Shinyoung Securities, said, “Despite global supply chain issues, we recorded favorable results that exceeded the upper limit of guidance based on increased sales of high value-added products and cost reduction.”
The share price of Samsung Electronics and SK Hynix has been determined according to the outlook for the memory semiconductor industry. In many cases, the direction of the domestic market is determined by the will of foreign investors, because foreign investors decide to invest in emerging countries mainly by looking at the flow of the semiconductor market in the United States. In particular, compared to Samsung Electronics, which also runs businesses such as smartphones and home appliances, SK Hynix often ‘couples’ with the share price of Micron.
For this reason, it is noteworthy whether the stock prices of Samsung Electronics and SK Hynix, which have been sluggish due to concerns about a slowdown in the memory semiconductor industry, will provide an opportunity for a trend change. What is worth paying attention to is the next quarterly earnings guidance that Micron presented along with the earnings announcement. Micron predicted that DRAM and NAND flash supply will increase by 10% and 30% QoQ, respectively, in the future due to increased demand from the data center and PC industries. In addition, it was estimated that the DRAM price cut would be lower than the market expected.
Do Hyeon-woo, a researcher at NH Investment & Securities, said, “The recent sluggish share price of SK Hynix due to a drop in DRAM spot prices is expected to improve with this opportunity.”
On the 30th, right after Micron’s earnings were announced, the stock price of SK Hynix rose 0.83% to close at 121,000 won. The stock price was pushed back to 112,000 won in mid-May due to concerns about a slowdown in the memory industry, but it seems to be preparing an opportunity to change the trend.
On the other hand, Samsung Electronics started with a 0.43% increase in the opening price on the same day, but ended up falling. The share price is expected to respond when the industry turnaround begins in earnest, as it continues to fluctuate in the ‘70,000 electronics’ level due to issues related to management block deals (out-of-hours mass trading) and foundry (semiconductor consignment production) yield issues.
Kim Seon-woo, a researcher at Meritz Securities, said, “Samsung Electronics and SK Hynix are highly likely to re-emphasize profitability-oriented management strategies through their earnings presentations at the end of April. Active communication will instill confidence in investors about the improvement of the industry.”
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