Memory Industry 4Q Results Surface This Week... US Micron's 'Gloomy' Outlook

Micron to Announce Earnings on 21st (Local Time)
Projected Revenue of $4.1 Billion...Half of Last Year’s Same Period

Taiwan Nanya Reports 61% Drop in Net Sales for Oct-Nov
Samsung Electronics and SK Hynix 4Q Forecasts Also Plummet

[Asia Economy Reporter Kim Pyeonghwa] The semiconductor memory industry is facing a red alert for its Q4 performance outlook this year due to an unprecedented downturn in the semiconductor market. As earnings announcements from domestic and international memory businesses, starting with the U.S. company Micron Technology, are being scheduled one after another, forecasts predict a continued negative trend.

Micron, a major U.S. memory semiconductor player and the world's third-largest DRAM company, will announce its Q1 results for the 2023 fiscal year (September to November this year), corresponding to Korea's Q4, on the 21st (local time). Micron's earnings announcements come earlier than those of other memory semiconductor companies, making it a leading indicator for the memory industry's performance trends.

U.S. securities analysts expect Micron to record sales of around $4.1 billion to $4.2 billion for the quarter. The U.S. investment information firm Seeking Alpha projected Micron's expected sales for the quarter at $4.15 billion. This would represent a 46.01% decrease compared to Micron's sales of $7.687 billion in the same quarter last year. In its previous quarterly earnings announcement, Micron had forecasted that this quarter's sales could fluctuate by $250 million around a base of $4.25 billion.

Given this situation, the European investment bank Deutsche Bank lowered Micron's target price from $60 to $55 per share last week and downgraded its investment opinion from "buy" to "hold." Sydney Ho, a Deutsche Bank analyst, stated in a related report, "The current recession appears to be lasting longer and more severely than expected, so we intend to be cautious regarding the memory market," and added, "It is premature to be optimistic that the economy will soon reach the cycle bottom."

In the memory industry, Taiwan's Nanya, which also tends to announce earnings relatively early, will release its Q4 results early next month. Like Micron, a deterioration in performance is anticipated. According to Nanya's reported monthly net sales, the net sales for October and November, corresponding to Q4 this year, were NT$27.82 million and NT$27.71 million, respectively. Compared to the same months last year, these figures plunged by 61.4% and 61.8%, marking the steepest decline this year.

The domestic semiconductor industry is also expected to take a direct hit from the market downturn in Q4 this year. According to financial information provider FnGuide, the consensus sales estimates (average of securities firms' forecasts) for Samsung Electronics and SK Hynix in Q4 are KRW 76.2912 trillion and KRW 8.8619 trillion, respectively. Operating profits are expected to be KRW 8.0927 trillion and a loss of KRW 486.1 billion, respectively. Samsung Electronics' operating profit is forecasted to decrease by 41.64% compared to the same period last year. SK Hynix is expected to return to a loss for the first time in 10 years.

In the domestic securities market, evaluations suggest that memory demand is passing through the worst phase in history due to worsening market conditions such as the global economic recession and inflation. Choi Doyeon, a researcher at Shinhan Investment Corp., stated in a report on Samsung Electronics, "With memory prices and shipments falling short of expectations, semiconductor operating profit is projected to be KRW 2.8 trillion," adding, "Depending on year-end shipments, Q4 estimates for this year may be further downgraded."

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