The latest financial report reveals that South Korea's two major semiconductor giants, Samsung and SK Hynix, are facing huge inventory pressure. As of the end of June this year, the amount of semiconductor inventories of the two companies has soared to more than 50 trillion won, a record high. This not only shows the grim situation of excess inventory in the memory market, but also implies that the pace of industrial recovery is not optimistic.
Experts in the industry were shocked by this data. The inventory of 1.2 trillion won is quite huge. If the average annual income of Nanya Branch, the largest DRAM factory in Taiwan, is about 65 billion yuan in the past six years, this is equivalent to 18 times that of Nanya Branch. annual revenue.
In terms of market share, according to data from research firm TrendForce, in the fourth quarter of last year, Samsung’s global share in the DRAM market was 45.1%, far ahead, while SK Hynix ranked first with a market share of 27.7%. second. In the field of flash storage (NAND Flash), Samsung also occupies a leading position, with a global market share of 33.8% in the fourth quarter of last year, while SK Hynix (including Solidigm) ranked third with a market share of 17.1%.
According to Korean media Etnews, the semi-annual financial reports of Samsung and SK Hynix showed that as of the end of June this year, the inventory of Samsung's semiconductor business DS department (mainly memory-based) reached 33.6896 trillion won, while SK Hynix's semiconductor inventory The amount is 16,420.2 billion won. Compared to the end of 2022, this represents an increase of 15.9% and 4.8%, respectively.
Combined, Samsung and SK Hynix had a total semiconductor inventory of 50.1098 billion won in the first half of the year. Samsung's inventory accounted for 12% of total assets from 11.6% at the end of 2022, while SK Hynix also rose from 15.1% to 16%.
Industry analysts believe that although some people once hoped that the unblocking of the mainland market would stimulate the recovery of memory demand, but there is still no sign of a significant rebound. In addition, due to the impact of high inflation in Europe and the United States, the global consumption power has declined, and the consumer electronics and automobile markets have been affected. Memory is widely used in 3C electronic products, so it bears the brunt of severe business challenges. The rising inventories of Samsung and SK Hynix suggest that the overall memory market is still facing a severe situation.
The industry generally believes that the heavy losses in the memory industry in the past were mostly related to the continued slump in prices. In recent years, major manufacturers have begun to control production capacity more carefully to ensure that prices will not remain below cost prices for too long, which will help digest inventory quarter by quarter. It is expected that from the end of this year to the beginning of next year, the correction effect will be more obvious.
Li Peiying, general manager of Nanya Branch, believes that the DRAM industry has bottomed out in the second quarter, and some quotations have begun to rebound this quarter. He believes that the market conditions in the fourth quarter may restore the balance between supply and demand, and the performance in the second half of the year may improve month by month.
Winbond said that as customer demand picks up, Taiwanese and Chinese factories will gradually reduce production capacity, from 30% to 40% in the fourth quarter of last year to less than 20% in the third quarter. Winbond is optimistic about continued operational growth in the third and fourth quarters, although not overly robust.
Phison also looks forward to the recovery of market conditions. They expect that as the major NAND chip manufacturers have successively announced to expand the scale of production reduction, coupled with the current relatively low price, it will help to promote a substantial increase in the capacity of NAND memory modules. All they are looking forward to now is a gradual pick-up in demand, which is expected to be in short supply again.
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