[Peace&Chips] "The Most Exciting Period in 40 Years of Innovation"... All Three Memory Giants Approaching Profitability

Kyung Kye-hyun, President of Samsung Electronics, Expresses Optimism on AI Demand
Kwok No-jung, President of SK Hynix, Also Offers Positive Outlook
Memory Market Growth Rate Expected to Reach 43.9% This Year
Samsung Electronics Anticipates Semiconductor Profit Turnaround in Q1

"The demand driven by innovative artificial intelligence (AI) solutions will open unprecedented new possibilities from data centers to the edge. This is undoubtedly the most exciting period of memory innovation I have experienced in my over 40-year career."

Sanjay Mehrotra, CEO of Micron, stated this while announcing the fiscal year 2024 second quarter results (December 2023 to February 2024) this month. Considering that an industry expert with more than 40 years of experience expressed such high expectations, it seems the memory semiconductor industry has great hopes as it faces the AI era.

This week alone, there were numerous statements expressing optimism related to AI. Kyung Kye-hyun, President of Samsung Electronics' Device Solutions (DS) Division, revealed on his social media account that the importance of High Bandwidth Memory (HBM) is increasing due to AI demand. In his post, President Kyung mentioned that demand for custom HBM production is rising and predicted, "Customers will work with us on that."

SK Hynix also appears highly optimistic about the growing demand. At the regular shareholders' meeting held this week, Kwak No-jung, President of SK Hynix, said, "As AI services evolve into multimodal (processing various data such as text, voice, and images), the memory capacity required to implement this will expand significantly," adding, "Computing demands are continuously increasing amid faster technological advancements than ever before."

The market is also buzzing with positive forecasts. This week, Samsung Electronics' stock price recovered to the 80,000 KRW level for the first time in over two years. SK Hynix's stock price also surpassed the 180,000 KRW level for the first time this week, showing a meaningful trend. Micron's stock price has also surged recently, rising 98.87% compared to a year ago as of the closing price on the 28th (local time).

This year, the memory industry is expected to welcome a full-fledged spring, buoyed by the AI effect. Since the semiconductor market experienced a severe cold spell during the downturn, the upcoming spring is expected to be warmer. Hyundai Motor Securities, forecasting with market research firms TrendForce and HIS, projects a 43.9% growth rate for the memory market this year. This is significant compared to the overall semiconductor market growth rate of 17.0% and the system semiconductor market growth rate of 10%.

Consequently, attention is growing on the performance of the top three memory companies this year. In Samsung Electronics' case, memory performance increased in the first quarter, likely turning the entire semiconductor business profitable. With SK Hynix and Micron already moving out of negative growth, Samsung Electronics joining them suggests that the memory market turnaround (performance rebound) will begin in earnest.

Kim Rok-ho, a researcher at Hana Securities, recently supported this outlook by raising Samsung Electronics' memory price forecast. Researcher Kim said, "The quarter-over-quarter increase in memory prices has been revised upward from 15% to 19% for DRAM and from 15% to 30% for NAND," adding, "Thanks to the memory segment turning profitable, the semiconductor division is expected to return to profitability."

According to F&Guide, a financial information company that aggregates securities firms' forecasts, SK Hynix's operating profit for the first quarter is estimated at 1.4741 trillion KRW. Kim Dong-won, a researcher at KB Securities, stated in a report on SK Hynix, "The average selling price (ASP) of DRAM is expected to rise 74% year-over-year this year, and the sales proportion of HBM in DRAM will double compared to last year," forecasting that "HBM will account for 23% of total DRAM sales."

Editor's NoteSemiconductors, often called the rice of modern industry. Although we hear the term daily, it’s hard to explain it clearly. Peace & Chips will make the complex concepts and overall industry trends easy to digest for you. Just bring your spoon.

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