DRAM market share dominates, why is Samsung still besieged?

The company expects that Samsung's global DRAM market share is expected to hit its highest level in three years. In addition, the decline in memory semiconductor prices has slowed down. The outside world expects Samsung to improve revenue. However, many analysts have pointed out that Samsung Electronics is still full of many prospects. Certainty.

The Korean media "Daily Economy" report pointed out that in the fourth quarter of last year, ICT companies delayed investment and caused the DRAM industry to be depressed. It is still difficult to ensure that the DRAM industry can restore its past glory in the future. On the other hand, Chinese companies are pressing Samsung Electronics at a low price in the panel field, and Samsung Electronics' smartphone business is slow to recover. It is difficult to quickly improve revenue. Not only that, Samsung Electronics has to face Japanese export restrictions, Sino-US trade disputes, and vice president's lawsuits.

Since September last year, DRAM prices have continued to plummet. This decline did not begin to slow down until August of this year. The DRAM price (DDR4 8Gb transaction price) in August was 2.94 US dollars, the same level as last month. In particular, the price of NAND flash memory has risen for two months, and the outside world has begun to expect that the price has bottomed out and is about to usher in a rebound.

However, many analysts believe that DRAM prices still have a long way to go to the bottom. Even though IHS Markit predicts that Samsung’s DRAM market share will reach 47% in the third quarter, the Korean semiconductor industry still believes that although DRAM seems to have fallen to the bottom, DRAM Demand and inventory have not recovered, and it is too early to judge whether DRAM prices bottom out.

Most analysts believe that the DRAM industry will recover in the long run. But there are many different opinions on the timing of the rebound. Some forecasts believe that with the expansion of 5G, Internet of Things (IoT), artificial intelligence (AI), electric vehicles and other industries next year, demand for memory chips will rise, Samsung's revenue is expected to rebound in 2021.

The securities industry pointed out that Samsung Electronics' third-quarter profit is expected to improve, but it is difficult to return to its previous heyday. The securities industry predicts that Samsung Electronics’ revenue this year will be about 27 trillion won, and it is expected to grow to about 35 trillion won next year. However, compared with the profit of 2017 and 2018 (about 50 trillion won), there is still considerable room for growth.

On the other hand, although the semiconductor business accounts for a large proportion of Samsung Electronics' profitability, it must also pay attention to the development of smart phones and displays. For example, although the Galaxy Note10 and Galaxy Flod have been well received in the second half of the year, the increase in actual revenue and profitability remains to be seen.

In the display business, the recent report of the Asiana Financial Management Institute pointed out that small OLEDs may be oversupplied within three years, and the company's response is quite important. KTB Investment Securities Researcher Jin Liang Zai (transliteration) pointed out that the Chinese circle of enterprises began mass production of OLED panels this year, which may affect the performance of the following year