The memory semiconductor market, which led to an economic growth rate of more than 3 % last year, is expected to continue this year. Some predicted that the memory semiconductor super-cycle will be on a downward curve from the second half of last year. However, the observation that supply shortage will continue throughout the year due to the increase in memory demand is predominant.

Korean memory semiconductor companies recorded the highest sales performance last year. SK Hynix said on January 25 that it recorded sales of KRW 30.9 trillion, operating profit of KRW 13.72 trillion, and net income of KRW 10.642 trillion last year. It is the highest ever performance. Sales grew 75 %, operating profit 319 %, and net profit 260 %. The operating margin reached a whopping 46%.

Samsung Electronics, which is expected to announce its earnings on March 31, is expected to record sales of KRW 70 trillion and operating profit of KRW 35 trillion only in the semiconductor division last year. It is estimated that the two companies earned more than KRW 40 trillion in operating profits, reaching KRW 100 trillion in sales last year.

The Bank of Korea said last year Korea`s real GDP grew 3.1 % year-on-year.

Semiconductor exports last year were the largest ever. USD 99.68 billion, an increase of 60.2% over the previous year. According to the Ministry of Commerce, Industry and Energy, the proportion of semiconductors in total exports rose from 9% in 2012 to 17% last year. As exports of semiconductors surged, total exports also increased by 15.8% from the previous year.

Meanwhile, it is expected that memory semiconductor prices will peak at the end of last year, and it will be difficult to record 3% economic growth this year after last year. However, many semiconductor makers and securities firms are expecting high-end semiconductors to continue this year.

Lee Myung-young, vice president of SK Hynix, said, "DRAM demand growth is expected to be 20% this year, and if the capex of the industry increases more than last year, the process transition period is longer than the past and the amount of wafer input is limited. The supply shortage will continue. "NAND Flash also predicted that supply shortages will be eased somewhat, but there will be no rapid market changes.

The company also anticipated an additional increase in memory demand due to security flaw issues and virtualization growth in Intel`s central processing unit (CPU). "If you have performance bottlenecks due to Intel security patches, you need to supplement your traffic with additional servers," he said. "Some people expect 20 to 30 % more server memory (depending on the bug) "He said. In addition, demand for GPU (graphics processing unit) for the cryptocurrency will increase, and PC demand for DRAM will also increase.

SK Hynix, an analyst with financial information company Wisen, posted an average of KRW 36.3 trillion in sales and KRW 16.6 trillion in operating profit this year. This is a 21 % increase over last year. The industry also expects Samsung`s performance to grow by more than 10% this year, thanks to the brisk memory semiconductor market.

However, there are not many opinions that either securities or semiconductor industry will continue to improve until next year. SK Hynix estimates that its 2019 operating profit estimate will be about 14.92 trillion won, which is about W1.7 trillion less than this year. Samsung Electronics also predicted that semiconductor earnings growth will slow down next year.

An industry expert said, "As there were not many experts who predicted the semiconductor boom last year, it is too early to discuss the boom or peak. However, generally speaking, the semiconductor market should be prepared for the recession.” He mentioned.


By Park Jung Il comja77@


[ copyright ⓒ The Digitaltimes ]