Memory Chips
The memory semiconductor market is projected to post double-digit growth next year. As a result, the top-ranked Samsung Electronics and SK Hynix, which is in third place, are expected to perform better. However, it is unclear whether or not an increase in demand will actually lead to an improvement in profits.
According to semiconductor e-commerce site DRAMeXchange on Dec. 8, the global DRAM market is expected to be worth US$54.1 billion (60.3 trillion won) next year, a 16 percent year-on-year gain. On the other hand, the NAND flash market is likely to grow 13 percent year-on-year to reach US$27.6 billion (30.8 trillion won) in 2015, up 13 percent from this year.
The DRAM market is divided up by Korean firms Samsung and SK Hynix, and U.S. company Micron as of the third quarter of this year. The combined share of Samsung (50.7 percent) and SK Hynix (27.6 percent) is 68.3 percent. Samsung accounts for 29.7 percent of the NAND flash market, with SK Hynix at 10.3 percent, and therefore their combined share amounts to 40 percent.
Currently, the two Korean chipmakers are working to secure profits in line with the conversion into nano-scale microprocessing and to improve production capabilities. The two companies are preparing for the operation of the Line 17 facility and the M14 facility, respectively. Samsung already started to mass produce 20 nm DRAM, and SK Hynix is also scheduled to complete the development of micro-processing for 20 nm DRAM within the year, preparing for mass production.
As for NAND flash, Samsung is strengthening product portfolios through the mass production of 10 nm-class products and 3D V-NAND flash. SK Hynix recently finished the development of technologies for V-NAND and TLC NAND flash, and is scheduled to produce those products from next year.
Industry analysts are saying that the competitiveness of local memory semiconductor companies is expected to further improve as a result. In the third quarter of this year, SK Hynix hit the 30 percent mark in returns on sales, and Samsung's operating profit margin in the memory semiconductor business is also considered to exceed 30 percent.
Nevertheless, the price of memory semiconductors is acting as a decisive factor for the performance of local semiconductor companies.
As of late November, the price of a 4GB DRAM module was US$31.75, showing little change compared to early November. As for NAND flash, 64Gb products fell 5.07 percent.
However, the market outlook has been positive so far. DRAMeXchange said, “DRAM manufacturers are going to log strong growth and make huge profits in 2005.” The semiconductor e-commerce site added, “In particular, the weight of mobile DRAM, which comprises 36 percent of the DRAM market, is likely to increase to 40 percent next year.”