Brighter Day to Approach for Global Memory Industries

It seems that oversupply of memories that has been continuing for almost 2 years is going to be resolved soon and this will improve performance of memory industries.

“Situation regarding oversupply of D-RAMs is gradually resolving starting from end of last quarter.” said Director (President) Kim Jun-ho of SK Hynix’s Corporate Center during an announcement of SK Hynix’s second quarter’s performance on the 26th. “This positive situation will continue on even after third quarter.”

“Price of NAND-Flash already rose due to lack of supplies.” said Director Kim. “Demands for SSD (Solid-State Drive) has increased on full-scale and predictions that believe that storage capacity of new Smartphones (iPhones) that are going to be released during second half of this year is going to increase are having positive effects on markets.”

“Number of inventories for second quarter decreased from number of inventories for previous quarter as there were more shipments than outputs.” said Director Park Rae-hak of D-RAM Marketing Group. “This kind of phenomenon will be maintained during third quarter as well.”

SK Hynix is confident that market situation for memories will be recovered during second half of this year. Price of memories already stopped falling since last month and it has started becoming steady or increasing as there is balance in supplies for demands.

According to a market research company called DRAMeXchange, price of 64GB MLC (Multi-Level Cell) NAND-Flash was $2.24 in June which is 10.89% increase from May. Price of NAND-Flash had continued to fall since October of 2014 and although it was steady time to time, it did not increase. Industries came to conclusion that supply of NAND-Flash did not catch up to demands.

Price of D-RAM stopped falling also. Fixed transaction price of DDR3 4GB D-RAM was $1.25 at the end of June and this value was same as the previous month. Price of D-RAM had continued to fall since November of 2011. “Because demands for new products are traditionally high in third quarter, situation regarding supply of D-RAMs will be improved much more.” said President Kim Jun-ho. He is hinting his expectations that price of D-RAM can increase.

Experts are finding reasons on why market situations of memory industries have become better from supply sides than demand sides. Sales of IT products such as PCs, Smartphones and others did not increase much.

Amount of increase in supply was low as Samsung Electronics, SK Hynix, and Micron all couldn’t actively increase or did not increase percentage of memories with next-generation processes.

This kind of situation is expected to continue on during third quarter as well. “We are going to secure profitability and increase our market share.” said Director Park Rae-hak. He is indicating that SK Hynix won’t increase supply rate suddenly.

On this day, SK Hynix made an announcement that it made $3.46 billion (3.9409 trillion KRW), $398 million (452.9 billion KRW), and $251 million (286.1 billion KRW) in sales, operating profit, and net profit respectively during second quarter. Although sales increased 8% compared to previous quarter, its operating profit and net profit decreased 19% and 36% respectively. Compared to second quarter of last year, its sales, operating profit, and net profit decreased 15%, 67%, and 74% respectively.

Staff Reporter Han, Juyeop | [email protected]