As domestic memory semiconductor companies such as Samsung Electronics and SK Hynix are scheduled to announce their third-quarter earnings in October, attention is focused on the performance report of the U.S. semiconductor company Micron, which will announce its quarterly earnings first on the 27th. This is because the Micron earnings will reveal the extent to which the DRAM market, which has cut the earnings of Korean semiconductor companies amid a sharp price drop, is currently recovering.
Micron, the largest memory semiconductor company in the U.S., is scheduled to announce its fiscal year 2023 fourth-quarter (June to September) earnings after the New York Stock Exchange closes on the 27th. The focus is expected to be on confirming whether the global average selling price (ASP) of DRAM has successfully rebounded during June to September through Micron's earnings. Micron, which ranks third in the global DRAM market with a 25.8% share following Samsung Electronics (39.6% in Q2) and SK Hynix (30.1%), could signal an improvement in the semiconductor industry if it shows a rebound in DRAM ASP in this quarter's results.
In particular, unlike domestic companies that are increasing the production ratio of high-performance, high-value-added DRAM, Double Data Rate (DDR)5, and High Bandwidth Memory (HBM)3, driven by the expanding AI semiconductor market, Micron is a latecomer in DDR5 and HBM3 development and has shown minimal achievements related to AI semiconductors. This means that the price trend of legacy (older) products like DDR4 has an absolute impact on the DRAM ASP trend.
Moreover, DDR4 is a representative product that the global semiconductor industry has cut production of to overcome the semiconductor downturn. Therefore, through Micron's DRAM ASP trend, which has a high proportion of DDR4 products, the semiconductor industry can also gauge the effect of production cuts in the DRAM legacy product group that have been implemented so far. Youngmin Ko, a researcher at Daol Investment & Securities, said, "If a rebound in DRAM ASP is confirmed in Micron's earnings, it will be clear evidence of the end of DDR4 price declines and the entry into a gradual improvement phase," adding, "Micron is expected to see a 1-5% increase in DRAM ASP this quarter."
The semiconductor industry believes that although the memory semiconductor market has passed its worst phase, improving earnings is difficult with the expansion of DDR5 and HBM demand alone, so an overall recovery in IT device demand is necessary. Even SK Hynix, which is leading the market, has a limited proportion of DDR5 and HBM, making it difficult to turn deficit earnings into profits despite the future competitiveness of the DRAM market being determined by who expands the DDR5 and HBM share more.
SK Hynix's HBM share within DRAM is expected not to exceed 20% this year. The penetration rate of DDR5 in the DRAM market is also only around 10%. A proper recovery in the semiconductor industry can only be discussed when the demand and prices for general-purpose products, which have accumulated as inventory, recover in conjunction with the overall demand for IT devices and general data center servers.
Meanwhile, the earnings forecast for Samsung Electronics' third-quarter results, to be announced next month, continues to be revised downward due to the slow pace of improvement in the semiconductor division (DS) deficit. The recent one-month consensus for Samsung Electronics' third-quarter operating profit, compiled by financial information provider FnGuide, is 2.185 trillion won, down more than 300 billion won from the estimate of 2.5324 trillion won three months ago. SK Hynix is expected to record an operating loss of 1.6413 trillion won.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
