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According to South Korean media reports, South Korea's two largest semiconductor giants, Samsung Electronics and SK hynix, lost more than 21 trillion won (about $16.1 billion) in their chip business, mainly due to the cyclical downturn in the semiconductor industry in 2023. It is reported that the global oversupply has been continuing to affect the chip division, known as the "cash cow" of Samsung Electronics, causing the share price of Samsung Electronics, the world's No. 1 company, to fall by 77.6% year-on-year in the third quarter of this year. Samsung's chip business has accumulated operating losses of 12.7 trillion won in the first three quarters of this year.
Starting at the end of 2022, the oversupply of memory chips began to hinder the growth of the global semiconductor industry. Even after the pandemic, demand for electronic devices has not rebounded, which has made SK hynix, the world's top memory chip maker, unable to escape the impact of the industry slowdown. Revenue in the third quarter of 2023 plummeted 17% year-on-year, and the cumulative operating loss in the first three quarters of this year was 8.1 trillion won. However, there are also signs of recovery in the memory chip industry, as there has been a surge in demand for advanced memory chips, which has also helped to control inventories and stabilize price declines.
However, semiconductor inventories at Samsung Electronics and SK hynix remained high in the third quarter of this year due to shrinking demand due to a prolonged global economic downturn. According to Samsung's quarterly report, as of September, Samsung's inventory assets have reached 55.2 trillion won (about 42.3 billion US dollars), an increase of 5.9% from 52.1 trillion won at the end of last year. In particular, in the chip business, inventory assets have risen from 29 trillion won to 33.7 trillion won, an increase of 16.1%.
The global memory chip industry is a highly competitive and growing industry. With the advent of the digital era, the demand for memory chips is increasing, driving the rapid development of the industry. Major manufacturers around the world have invested heavily in research and development of new technologies to increase storage capacity and speed to meet market demand. At the same time, the industry is also facing the challenge of technological upgrading, which requires continuous innovation and improvement to maintain a competitive advantage. Globally, the United States, China, Japan and other countries have a huge memory chip industry chain and have become important participants in the global memory chip industry.
-- The level of competition in the global memory chip industry
At present, the global memory chip market is highly concentrated, and representative companies include South Korea's Samsung and SK hynix; Micron and Western Digital of the United States; Kioxia of Japan, etc. Mainland enterprises YMTC and Changxin Storage are continuously increasing their investment in the NAND Flash and DRAM markets, and have made breakthroughs in some fields, gradually narrowing the gap with foreign OEMs. In the global NOR Flash market, the mainland company GigaDevice has ranked among the top three, and GigaDevice Group also has Changxin Storage (CXMT), which means that GigaDevice Group has both independent research and development capabilities of China's NOR Flash and DRAM, and has become an important role in the development of China's semiconductor memory industry.
-- Memory chip industry
Market Segments –Competitive landscape of the DRAM market
The DRAM market is highly concentrated, and the industry is mainly monopolized by Samsung, Hynix, and Micron, with a market share of more than 90% in 2022.
-- Memory chip industry
Market Segments:NAND FLASH前景预测
Flash memory has become an important part of smartphones. The demand for NAND flash memory has grown exponentially, driven by the increase in the average capacity of smartphones. NAND flash memory for smartphones can dramatically improve performance for things like web browsing, email loading, gaming, and even social networking sites. With the popularity of smartphones, companies are adding additional features and apps to differentiate themselves from other manufacturers. For example, manufacturers are integrating features such as gesture control, fingerprint scanners, and GPS into devices, which is boosting the demand for NAND flash memory. THE NAND FLASH MARKET IS EXPECTED TO BE AROUND $104 BILLION BY 2028.
South Korean media Hankyung reported that Samsung's semiconductor (DS) division has set a business target for this year, planning to raise its operating profit target to 11.5 trillion won.
According to the latest data from the World Semiconductor Trade Statistics Association (WSTS), despite the overall decline in the global semiconductor market in 2023, they raised their growth forecast for the global semiconductor market in 2024, driven by strong demand for AI chips. The year-on-year growth rate is expected to reach 13.1%, and the total size will climb to a record $588.36 billion.
According to the latest forecast from TrendForce, the prices of DRAM and NAND memory chips (including eMMC and UFS) for mobile devices will rise further in the future. It is expected that by the first quarter of 2024, the quarter-on-quarter increase will expand to 18~23%. Experts note that this trend may be driven by panic buying, which leads to further price increases.
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