IC Insights Announces... Global Memory Slump
Next Year D-RAM Demand Growth Forecasted to Be in Single Digits for the First Time
[Asia Economy Reporter Moon Chaeseok] In June, considered the peak season for the semiconductor market, global semiconductor sales volume declined for the first time since statistics began in 1976. There are also forecasts that next year's DRAM demand growth rate will remain in the single digits for the first time. This is expected to act as a negative factor for the management of major memory companies such as Samsung Electronics, SK Hynix, and US-based Micron.
According to a recent announcement by semiconductor market research firm IC Insights on the 8th, global semiconductor integrated circuit (IC) sales volume in June decreased compared to the previous month. Although the exact amount of the decrease was not disclosed, this is the first time since 1976 that June sales volume has declined month-over-month. The previous record was a 1% drop in June 1985.
Typically, June sales have increased. This is because product demand rises at the end of the quarter. The trend of consumer electronics and IT device manufacturers purchasing semiconductor chips in line with increased sales during vacation periods cannot be ignored. Therefore, the decline in June sales is considered unusual. IC Insights explained, "Generally, June has shown a single-digit or double-digit increase compared to the previous month, but this year it recorded a negative (-) growth rate for the first time."
IC Insights analyzed that the slump in the memory market influenced the sales decline. Due to concerns about a global economic recession and inflation, demand for IT products has contracted, and US IT companies have become cautious about server investments, leading to reduced demand for memory semiconductors. In particular, IC Insights noted a noticeable decrease in shipments of personal electronic products such as smartphones, PCs, TVs, and gaming consoles.
Concerns are growing as the outlook for major memory semiconductor companies' performance next year is also not optimistic. A trend of 'decreased consumption → increased inventory → price (unit price) decline' is emerging. According to Taiwanese market research firm TrendForce, last month the fixed transaction price of general-purpose PC DRAM products fell by 14.03% compared to the previous month. The fixed transaction price of general-purpose NAND flash memory cards also dropped by 3.75%.
TrendForce also predicted that next year's DRAM demand bit growth (production increase rate converted to bit units) will remain at 8.3%, marking the first time in the single digits. The expected supply bit growth rate is 14.1%. When supply exceeds demand, prices inevitably fall. This acts as a cause for declining profitability among memory companies. NAND flash supply forecasts (32.1%) also exceeded demand forecasts (28.9%).
Considering this situation, companies are adjusting production volumes and reconsidering facility investments. SK Hynix postponed the expansion plan for its semiconductor line in Cheongju last June. Samsung Electronics also stated during its earnings conference call on the 28th of last month that it "will flexibly review short-term facility investment plans."
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