Semiconductor Industry Stays 'Strong' Amid COVID Storm... DRAM Demand Drives Performance

Samsung and Hynix, Combined 2Q Operating Profit Reaches 7 Trillion KRW
Expectations for Increased Smartphone and Console Game Demand in Second Half

SK Hynix Icheon Plant

[Asia Economy Reporter Dongwoo Lee] Samsung Electronics and SK Hynix succeeded in improving their performance in the second quarter of this year, thanks to increased DRAM demand despite the COVID-19 pandemic.

According to the semiconductor industry on the 25th, Samsung Electronics recorded operating profit in the semiconductor division of around 5.4 trillion KRW in the second quarter, and SK Hynix recorded 1.95 trillion KRW, with a combined total expected to exceed 7 trillion KRW.

The industry analyzed that the demand for memory increased due to the strengthening of non-face-to-face society such as remote work and online classes caused by COVID-19. There is also an expectation that the growth of the enterprise and consumer memory markets will continue in the post-COVID era.

The decline in DRAM prices in the second half is also expected to show a rapid recovery as demand increases. In its earnings announcement, SK Hynix stated, "We recognize the second half of this year as the bottom of DRAM prices," but also predicted, "If there is no uncertainty such as COVID-19, the adjustment period will be quite short."

By the end of the second half, overall customer inventory is expected to be healthier than in the second quarter, with next year's DRAM bit growth (bit shipment growth rate) expected to exceed this year's by 20%, and NAND flash bit growth expected to be in the low 30% range.

The semiconductor industry expects the recovery of smartphone sales to be a major variable in the second half's performance. Semiconductors for smartphones account for about 30% of the total memory market.

Samsung Electronics is anticipating a recovery in consumer sentiment ahead of the launch of premium smartphones such as the Galaxy Note20 and Apple's iPhone 12. Market research firm TrendForce forecasts that global 5G smartphone shipments in the second half of this year will exceed 500 million units, more than doubling compared to this year.

SK Hynix emphasized, "We will respond to mobile demand centered on 5G smartphones and demand for console game devices," adding, "In the computing market, where customer inventory management is expected to become relatively tight, we plan to expand sales of high-capacity module products."

This content was produced with the assistance of AI translation services.