[Click eStock] "SK Hynix, 4Q and beyond More Important Than 3Q"

D-RAM and NAND Prices Begin to Fall from 4Q... "Will Continue Until the First Half of Next Year"

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] SK Hynix is expected to post results slightly exceeding expectations for the third quarter of this year. However, since prices for both DRAM and NAND flash are anticipated to decline, trends after the fourth quarter are considered crucial.

On the 7th, Ebest Investment & Securities lowered SK Hynix's target stock price by 24.8% to 115,000 KRW, citing this background. The closing price the previous day was 96,500 KRW. The investment rating of 'Buy' was maintained.

First, the third-quarter results for this year are expected to surpass expectations. Ebest Investment & Securities forecast SK Hynix to record consolidated sales of 11.861 trillion KRW and operating profit of 4.192 trillion KRW in the third quarter. These figures represent increases of 45.9% and 277.9%, respectively, compared to the same period last year. Compared to the previous quarter, sales and operating profit are expected to rise by approximately 15% and 56%, respectively. These results slightly exceed market consensus estimates of 11.7694 trillion KRW in sales and 4.0493 trillion KRW in operating profit. Nam Daejong, a researcher at Ebest Investment & Securities, explained, "The shipment volumes and average selling prices of DRAM and NAND are each in line with expectations, and the rise in the KRW-USD exchange rate is estimated to have positively influenced the performance improvement."

Results exceeding market expectations are also anticipated through the fourth quarter. Ebest Investment & Securities projected sales of 12.667 trillion KRW and operating profit of 4.545 trillion KRW. However, the situation thereafter is critical. As customers' inventory levels increase and supply expands, fixed prices for both DRAM and NAND are expected to begin declining.

The downward trend in fixed prices is expected to intensify through the first half of next year. Researcher Nam stated, "The shipment volumes of DRAM and NAND by major global memory semiconductor manufacturers have already significantly exceeded expectations since the second quarter of this year," adding, "This will act as a factor deepening oversupply in the supply-demand situation next year."

He continued, "Looking at past cases, after transitioning to oversupply, the year-on-year growth rates of DRAM and NAND prices typically bottomed around -40%. Prices will vary depending on supply-demand conditions, but considering that price declines will begin from the fourth quarter of this year and that the degree of oversupply will worsen, expecting the memory semiconductor price decline to be short-lived is somewhat optimistic," he pointed out.

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