As per a recent report, it has been said that the global memory chip market is not hopeful. And due to this reason, many institutions have started predicting that the price of NAND flash memory and DRAM will be going to fall. The fall of more than 10% in the third quarter as well. Due to the huge decline in demand going presently.
Additionally, the fall in memory chip prices directly indicates the fact that the performance of memory chip manufacturers will be affected. And thereby, said in the report presented by South Korean media. In the report, industry analysts predicted Samsung Electronics and SK Hynix to face a decline in Q3. Although the reason for this decline is very obvious and that’s due to this low memory chip demand.
This report in Korean media states that the majority of the analyst forecasted that Samsung Electronics making a profit of 12.8 trillion won in the third quarter. The amount is equivalent to approx to 9 billion U.S. dollars, which is 18.6% down year on year. While SK Hynix’s operating an expected profit of 2.59 trillion won in the third quarter. That shows a year-on-year decline of 37.8% respectively.
Memory chips as the primary source of the profit
However, the Samsung Electronics conglomerate has a variety of businesses on the list. That covers smartphones, panels and various other companies. Notably, the device solutions sector where memory chips are placed has always been on top, as the primary source of their profit. Talking about the second quarter of this year, Samsung Electronics has operated an overall profit was 14.1 trillion won. Out of this, 9.98 trillion won, is for the device solution segment. In addition to this, the revenue and profit of the memory chip business will directly impact the overall revenue and profit of Samsung Electronics.
With respect to the above mention scenario, it has been judged by foreign media reports. Both Samsung and SK Hynix are the two big memory chip makers. And are currently facing the pressure of a double decline in shipments and average prices. Whereas, coming to the DRAM, analysts expect Samsungs shipment to decline by 3%. While the average selling prices declined by 17%.
Now by seeing this situation in the third quarter. The situation of memory chip manufacturers in the fourth quarter of this year does not seem to be optimistic. And thus by watching this fall, recently some research institutes predicted that the price of DRAM is expected to fall by 13% to 18% in the fourth quarter as well. And that will expand from the estimated 10% to 15% in the third quarter.
