With the poor global economic conditions and slowing demand for PCs and smartphones, Samsung, Micron and SK Hynix have suffered serious setbacks in their performance. Let's see how these giants turned around beautifully under the cold winter economy.
Samsung Ramped up factory construction and stable cooperation
Samsung has been the dominant player in the global NAND market and was able to account for 43.6% of the NAND market, but this year, Samsung DRAMD's Q3 revenue was $7.4 billion, down 34% sequentially.
Although storage revenue is not optimistic, but recently, Samsung's foundry side of the revenue of $5.58 billion, for the first time more than the main flash business NAND Flash flash memory business revenue of $4.3 billion, it can be seen that Samsung is making great efforts to fill the gap in the performance of the flash memory market, in order to maintain competitiveness, wafers and flash memory always have to be the top pillar of the business.
Samsung has suffered setbacks in storage but good things are happening in chip factories. Samsung Electronics announced last November that it had built nine chip factories in Texas, with some equipment to start delivery in January 2023, and three new semiconductor factories this year, including a $4.8 billion tax incentive for the chip factory built in Tyler.
Not only that, in November this year, the Korean media reported that Samsung Foundry, the foundry division of Samsung Electronics, has signed contracts with Nvidia, Qualcomm, Baidu, IBM and other companies to use 3nm process technology to make chips for them.
In terms of partner cooperation, customer resources are still relatively optimistic, like Qualcomm in cooperation with Samsung experienced Snapdragon 888 and Snapdragon 8 Gen 1 after the failure of two consecutive generations of products turned to TSMC, but based on the influence of a combination of factors such as Qualcomm and Samsung signed a secret agreement and optimistic about Samsung's 3nm technology capabilities, Samsung was chosen; from this point of interest, the cooperation chain is still very stable.
The storage market is not optimistic, but Samsung still chose to increase the size of the factory, it can be seen that the potential development of the storage market has a better outlook. Nowadays, Samsung is continuously improving the yield of 3nm, investing in building factories, stabilizing customers, and starting to diversify. In addition to cell phones, it is also attacking a number of fields such as security and automotive. Like the new sensor launched in July: the automotive-grade image sensor ISOCELL Auto 4AC.
Micron Technology changeover shipped 232 layers of NAND flash memory
Micron Technology's Q3 revenue was approximately $4.81 billion, down 23.3% sequentially. Accumulated losses have exceeded 900 billion won since the acquisition of Solidigm.
Declining server DRAM prices have led to high inventory and exacerbated operating losses. In response, the company first cut equipment costs by half; secondly, cut the supply of storage by cutting memory DRAM and flash NAND wafer production starts by approximately 20% in Q4 2022 and controlling capital expenditures by 30%.
In addition, accelerate the speed of advanced process advancement and constantly update iterations in technology, in addition to the 1β DRAM memory continues to ramp up. Micron recently officially shipped 232 layers of NAND flash memory, the first flash memory to enter the retail market and the world's first consumer SSD to use more than 200 layers of NAND, ahead of Samsung, SK Hynix and other manufacturers.
In addition to supply reduction and capital cuts, technology changes and holds advanced process technology to stand out in the industry.
SK Hynix Cut spending by more than 70%
SK Hynix Q3 DRAM revenue of $5.24 billion, down 25.2% YoY; NAND Flash Hynix Q3 revenue of $2.54 billion, compared to Q2 YoY growth rate of -29.8%, respectively.
Faced with a declining market, SK Hynix followed suit and said it would significantly reduce its capital expenditure by 70% to 80% next year. Originally, it insisted on expanding its spending chip capacity with about 21 trillion won, but it became the memory maker with the largest reduction in capital expenditure this year due to reduced market demand and uncertainty.
Although the demand for memory chips declined, SK Hynix power semiconductor and microcontroller (MCU) orders demand remained good and maintained a very high capacity utilization. This significantly eased the pressure from the decline in the storage business.
Recently developed a working sample of DDR5 multiplexer combiner column (MCR), the world's fastest memory the world's fastest MCR DDR5 DIMM memory.
Some industry insiders said that with the giant cost reduction and inventory, downstream demand has not yet improved in the short term, but the recent signs of bottoming out in the storage chip industry may stop the decline and rebound, and the inventory pressure in Q4 may be eased.
At the same time, some analysts said Q4 2022 storage IC prices fell further ringgit, negative expectations or bottoming out. But across the board, the storage IC cycle's short-term downward, medium and long-term trends continue upward.
Overall, no advance is a retreat, the storage industry is a strong industry with a constant cycle of supply and demand, and large manufacturers have not slowed down the pace of investment in expansion. Instead, after scaling back costs continue to increase the construction of plants, and the development of new technologies, in the predicament of the market downturn to preserve their competitiveness as much as possible.
Finally, no matter what industry, there is no eternal giant, the storage industry is also. The current semiconductor market is slowing down, and the major segments are gradually becoming saturated, especially downstream, with weak demand; so with strong capital and high market share, new tracks can be opened up appropriately. Now is the era of automotive intelligence and network connectivity, car storage, AI and other fields will become the new track that is favored.
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