The Korea Herald

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Robust demand likely to support Korean chipmakers through Q3

By Song Su-hyun

Published : June 14, 2020 - 15:32

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Samsung semiconductor fab in Hwaseong, Gyeonggi Province (Samsung Electronics) Samsung semiconductor fab in Hwaseong, Gyeonggi Province (Samsung Electronics)

South Korean chipmakers are forecast to fare well through the third quarter of this year despite aggravating economic conditions amid the prolonging COVID-19 impact, owing to robust demand for memory chips upon the growing noncontact market, according to industry sources Sunday.

The country’s semiconductor exports jumped 22.6 percent from June 1 to 10, compared to a year earlier, according to data by Korea Customs Service.

In May, the total semiconductor exports rose 6.6 percent, including both memory and non-memory chips, showed data by the Ministry of Industry, Trade and Energy.

Of the chip export growth, DRAM exports surged 17 percent on-year.

DRAM prices contributed to raising Korea’s chip export value as the fixed price of DDR4 8-gigabit inched up 0.61 percent to $3.31 in May. The unit price kept increasing for the last five consecutive months, according to market researcher DRAMeXchange.

The favorable figures suggest Korean chipmakers Samsung Electronics and SK hynix would post increased earnings in the second quarter compared to the first quarter or negative expectations.

Securities brokerages project Samsung’s semiconductor division is estimated to raise around 18 trillion won ($14.9 billion) in sales during the April to June period, obtaining about 5 trillion won in operating profit.

The estimates are about 55 percent and 32 percent up from the first-quarter figures, respectively.

SK hynix is widely predicted to achieve over 1 trillion won in operating profit, showing a better performance than the first quarter.

Market observers expect the chip industry to recover in the second half of the year as slowed demand for digital devices in the first six months would rebound in the coming months.

“Although some market researchers view chip prices would fall in the second half, chip demand is forecast to be better than expected and less affect the prices,” cited a report by KB Securities.

Sales of PCs and mobile products are expected to restore in the third quarter as manufacturers are planning on large-scale promotional events to make up for the sluggish sales in the first six months.

NAND flash memory is projected to soar about 9 percent in price upon strong demand.

“Due to tighter supply than market expectations, NAND sales are likely to keep rising in the third quarter,” said a report by NH Investment & Securities.

By Song Su-hyun (song@heraldcorp.com)