[Click eStock] "SK Hynix, Supply Reduction Effects to Begin in the Second Half of Next Year"

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[Asia Economy Reporter Kwon Jae-hee] NH Investment & Securities maintained its 'Buy' rating and target price of 117,000 KRW for SK Hynix on the 14th.

NH Investment & Securities forecasted that the turnaround in the memory semiconductor market will begin from the second quarter of next year. Memory companies are actively adjusting production and reducing new capacity expansions in response to price declines. SK Hynix announced that it would cut capital expenditures (Capex) in 2023 by 50% compared to the previous year (approximately 17.47 trillion KRW) and reduce production mainly of legacy products in both DRAM and NAND. Micron and Kioxia also mentioned that they would reduce investments to about 50% of the previous year and cut production by approximately 20% and 30%, respectively, next year.

As a result, the overall industry shipment growth next year is expected to be only 9% for DRAM. This figure includes inventory levels, and on a production basis, it is expected to record a year-on-year decline for the first time in history.

Do Hyun-woo, a researcher at NH Investment & Securities, predicted, "The supply reduction, combined with the expected recovery in smartphone and hyperscaler data center investments in the second half of 2023, will lead to performance improvements in the second half of next year and a large operating profit of 18.6 trillion KRW expected in 2023."

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