Memory Chip Boom
Samsung Electronics and SK Hynix, which accounted for 75% of the world DRAM memory semiconductor market, have achieved net profits of nearly 6 trillion won (US$5.1 billion) in the semiconductor business only in the fourth quarter of last year by way of their microprocessing technology ahead of competitors by two to three years. If this trend holds, Samsung Electronics is expected to achieve an operating profit of more than 20 trillion won (US$17 billion) in the semiconductor sector this year alone.
According to the electronics industry and market research firm DRAM Exchange on January 5, prices of DRAMs, the core area of memory semiconductors, skyrocketed over past six months. The price of DRAM DDR4 4Gb 2133MHz fell to US$1.3 in July last year but rebounded and is standing at US$2 now. This means that the price jumped more than 50% in only six months.
In particular, the price of a PC DRAM DDR3 4GB module recently climbed to US$25, up 39% from US$18 two months ago. It was also found that the average price of a PC DRAM in the fourth quarter of last year rose 25% to 30% year on year.
Average prices of a DRAM for servers and a mobile DRAM also swelled 10% to 15% and 3% to 7%, respectively in the fourth quarter of last year from a year before, DRAM Exchange said. In addition, DRAM Exchange expects average PC DRAM prices to rise by more than 30 percent in the first quarter of this year. It is forecast that prices of server and mobile DRAMs will also grow by 20% to 25% and 10% to 15%, respectively, in the first quarter.
"Samsung Electronics put into operation a mass production system for 10-nanometer (1 billionths of a meter) DRAMs for the first time in the world last year. But the Korean semiconductor giant is not actively expanding supply," said a representative of the semiconductor industry. "The DRAM supply and demand situation will be tightened this year and DRAM prices will continue to rise since SK Hynix will also roll out 10-nanometer DRAMs in the first half of this year."
In fact, the securities industry expects that Samsung Electronics which will announce its earnings on January 6, will post operating profit of around 4.5 trillion won (US$3.8 billion) only in the semiconductor sector in the fourth quarter of last year by selling DRAMs. This is an increase of more than 1.1 trillion won (US$935 million) compared to the previous quarter (3.37 trillion won or US$2.86 billion). Compared to 2.8 trillion won (US$2.38 billion) in the same period of the previous year, its surplus grew by more than a whopping 60%.
SK Hynix is expected to post an operating profit of 1.2 trillion won (US$1.02 billion) in the fourth quarter of last year. Its profit growth rate was 70% compared to the previous quarter (720 billion won or US$612 million). In this case, the amount of both companies' combined surpluses in the fourth quarter of last year is expected to hit nearly 6 trillion won (US$5.1 billion) according to prediction by securities firms.