According to a Reuters report, Samsung Electronics Co., Ltd. said on Thursday that after achieving the highest operating profit in the last two years in the third quarter, it expects the company's profit this quarter to decline.
　　
The company said that the company’s smartphone profits recorded the highest ever profit of 4.45 trillion won in the second largest quarter. In the quarter from July to September, the company’s operating profit increased by 59%.
　　
Analysts said that due to US restrictions that hit Chinese rival Huawei Technologies Co., Ltd., smartphone sales increased by nearly 50%, which may reflect Samsung's growth in market share. Analysts say that lower marketing costs are also a possible factor during the coronavirus pandemic.
　　
Samsung said that due to increased sales of low-end and mid-end smartphones and Huawei's inventory backlog before US sanctions offset the weak server demand, its chip profit in the third quarter increased by 82% compared with the same period last year, reaching 5.54 trillion. won.
　　
Operating profit for the third quarter was 12.35 trillion won (8.41 billion pounds), compared with 7.78 trillion won in the same period last year, in line with the company's estimate earlier this month.
　　
In terms of revenue, the company's revenue this quarter increased by 8% to 66.96 trillion won. Net profit increased by 49% to 9.36 trillion won.
　　
However, in the current quarter, due to oversupply and the continued lack of recovery in server demand, overall memory chip prices are expected to remain weak, said AvrilWu, an analyst at Research Institute TrendForce.
　　
Analysts said that due to competition from Apple’s latest iPhone 12 and the lack of Samsung’s new flagship models, Samsung’s smartphone shipments this quarter are expected to drop by about 5% from the third quarter.
　　
As we all know, a large part of Samsung's chip revenue comes from DRAM and NANDFlash, and these two parts of business are at a good time.
　　
NANDFlash: The market share of Korean factories exceeds 50%, which is favorable for stable prices
　　
Earlier, SK Hynix will buy Intel (Intel) NANDFlash business, by then it will rise to the world's second largest NANDFlash factory, second only to Samsung Electronics, Korean factory will exceed 50% of the NAND market share and have the right to speak in the market price. The industrial order is expected to stabilize, which is conducive to the stable performance of NAND prices.
　　
SK Hynix recently announced that it will buy Intel’s NANDFlash and SSD businesses for 10.3 trillion won, and acquire Intel’s Fab68 plant in Dalian, China, where 3DNANDFlash is manufactured. Intel will retain its advanced memory technology Optane business. All transactions are expected to be completed in 2025. .
　　
Samsung is currently the leading NANDFlash manufacturer with a market share of 31.4%, followed by Kioxia with 17.2%, while SK Hynix has a market share of 11.7%, and Intel has a market share of 11.5%. After acquiring Intel’s NAND business, SK Hynix’s market share will reach approximately 23.2%, surpassing Kioxia and becoming the second largest manufacturer of NANDFlash.
　　
At present, Samsung and SK Hynix are the top two DRAM manufacturers in the world, with a market share of more than 70% in the DRAM field. In addition to the acquisition of Intel by SK Hynix, it will rise to the second largest NANDFlash factory in the world, and the Korean factory also has a market share in the NANDFlash market. It will break through 50% and reach nearly 55%. It will once again become the dominant player in the memory market and have the right to speak in prices. With the improvement of the industrial order, the pressure of competition in the future will ease, which will also benefit the stable performance of prices.
　　
DRAM: Prices fall before the end of the year, and will grow for three consecutive years
　　
Research institute ICInsights said that due to the epidemic affecting consumption, although new smartphones are on the market, DRAM prices are expected to continue to decline by the end of 2020. However, in the future, driven by demand for 5G smartphones, servers and computers, the DRAM market is expected to continue. Over 10% growth in 3 years.
　　
The latest ICInsights report pointed out that due to the interference of the epidemic, be cautious about unnecessary spending. The DRAM price trend that is usually brought after the release of new smart phones may not be able to reproduce by the end of this (2020) year.
　　
With the outbreak of the new crown pneumonia (COVID-19), people are rapidly changing their lifestyles, and remote teaching, online shopping, and business activities have undergone drastic changes. In the first half of this year, DRAM quotations have increased in demand for personal and commercial computing, driving prices up. Data center servers have also increased demand for DRAM. The quotation shows that the average DRAM price in June this year rose to 3.7 US dollars, but in July and August it dropped to 3.51 US dollars.
　　
ICInsights expects that although the total shipment of 5G smartphones this year is estimated to be 200 million, DRAM demand should not increase significantly by December this year, and 5G smartphones will not cause DRAM supply to fall short of demand. DRAM prices may fall all the way to the end of this year.
　　
ICInsights said that the three major dynamic random access memory (DRAM) makers, including Samsung, SK Hynix and Micron, all conservatively expected that DRAM sales in the fourth quarter of this year and the first quarter of next year may slow down . Among them, Micron is mainly affected by the effective effect of Huawei's ban on September 15; Huawei contributed approximately US$500 million in DRAM sales of Micron in the first quarter.
　　
ICInsights said that despite speculation that some of Micron's products are expected to be allowed to resume supply to Huawei, Huawei has previously reserved about 6 months of DRAM inventory. Even if Micron is allowed to resume supply of some products to Huawei, it is expected that it will still be difficult to significantly help DRAM sales. beneficial.
　　
However, looking ahead, next year's 5G smartphone shipments are expected to reach 500 million units. Driven by demand for 5G smartphones, servers and computers, the DRAM market is expected to grow by more than 10% for three consecutive years.