US Micron Earnings Soar... Rising Expectations for Samsung and SK Hynix Strong Performance

[Asia Economy Reporter Suyeon Woo] The strong performance of US-based Micron, one of the world's top three memory semiconductor manufacturers, from March to May this year has raised expectations for the second-quarter earnings of domestic semiconductor companies.

Micron announced on the 30th of last month (local time) that its revenue from March to May reached $7.42 billion, a 36% increase compared to the previous year, while operating profit soared over 100% to $1.799 billion. This was driven by a surge in demand for memory semiconductors in PCs and data centers due to non-face-to-face demand caused by COVID-19. During this period, DRAM prices rose about 20% quarter-over-quarter, and NAND flash prices also recorded a high single-digit increase.

Micron also provided a sales guidance for the next quarter (June to August) at around $8.2 billion, exceeding market expectations. The company emphasized that the supply and demand for memory semiconductors would remain tight until 2022, and the price increase cycle would continue. To this end, Micron plans to increase investments, including the introduction of extreme ultraviolet (EUV) lithography equipment, raising its capital expenditure for this year from $9 billion to $9.5 billion.

Riding on this memory semiconductor boom, expectations for the second-quarter earnings of domestic semiconductor companies such as Samsung Electronics and SK Hynix are also rising. The consensus among domestic securities firms for Samsung Electronics' second-quarter results this year is revenue of 61.26 trillion KRW and operating profit of 10.8 trillion KRW, representing increases of 15% and 33% respectively compared to the same period last year. In particular, the operating profit of the semiconductor division (3.4 trillion KRW) is estimated to nearly double from the previous quarter to the high 6 trillion KRW range. SK Hynix, which has a high proportion of memory semiconductor business, is expected to see even more dramatic growth. The second-quarter consensus forecast predicts revenue of 9.79 trillion KRW, up 13% year-over-year, and operating profit of 2.69 trillion KRW, up 38%.

However, since Micron's stock price has fallen recently after the earnings announcement, the impact of strong semiconductor industry performance on stock prices remains uncertain. Industry experts interpret that despite recording strong earnings amid tight DRAM supply and demand, Micron's increased capital investment has acted as a cost burden on its stock price.

Kim Kyung-min, a researcher at Hana Financial Investment, said, "It is clear that suppliers (manufacturers) are in a favorable position due to the recent DRAM market supply shortage, but investors will want to confirm whether the same situation will continue after October this year," adding, "Such doubts and uncertainties are expected to weigh on DRAM manufacturers' stock prices for the time being."

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