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play. Jul 26, 2018 – 5:50 AM
Seoul
The production plans and prospects of Asian chip makers will be closely followed as they begin to publish their earnings this week after strong Decreases in their prices due to the world's $ 121 billion memory chips industry has experienced an unprecedented boom since the end of 2016, with profits reaching record levels and margins exceeding 70% . But the evolution of the industry to a newer technology of Nand 3D flash batteries – which are cheaper to assemble than the outgoing two-dimensional chips – saw production grow faster than demand this year and forced to smaller size. players aggressively reduce prices to keep market share.
Average prices for Nand flash memory chips have almost halved from a peak in 2017, and concerns of further declines have sent shares from major producers such as South Kor The SK Hynix of ea is down 7% on Monday
NAND flash memory chips, used for long-term data storage, are found in mobile devices as well as in memory cards, thumb drives, and SSDs. Margins are deteriorating mainly because the decline in the average selling price is proving much faster than cost reduction, "said Alan Chen, director of market research firm DRAMeXchange. lower prices will continue for the rest of the year.
Nomura estimates that Nand's flash chip supply will increase by 40 to 50 percent this year, just as demand slows due to slowing Global smartphone sales: The prices of Dram memory chips – which help servers, gaming personal computers and cryptocurrency devices handle large amounts of data continuously – have risen by more than 20% this year.
they lose momentum as part of a Chinese price survey against heavyweights in the industry such as Samsung Electronics Co Ltd, and Beijing's willingness to provide local chips for reduce its dependence on foreign supplies. As part of its "Made in China 2025" strategy, three companies – Yangtze Memory Technologies Co Ltd, Innotron Memory and Fujian Jinhua Integrated Circuit – are preparing to mass-produce memory chips, according to a nalysts.
"Until the first half of next year, the scale of production of Chinese enterprises will be low but their rate of return will improve and will lead to an increase in production that will influence the semiconductor market from the second said Song Myung Sup, analyst at HI Investment & Securities.
Andrew Norwood, chief analyst at Gartner, said that the entry of China on the market could be one of the factors behind the aggressive expansion of capabilities.He said that 2020 and 2021 would see "significant revenue reductions."
D & # 39; others are more optimistic, pointing to the demand for data centers and new technologies such as the 5G mobile network and autonomous driving
To disappear, we think that a $ 90 billion operating profit US could be maintained in 2019, instead to collapse, "said Peter Yu, an analyst at BNP Paribas, in a recent report. "The big and constant profit is the new standard for the memory industry."
Samsung, the world's largest chip maker, is expected to record a record profit of 12.5 trillion won ($ 15 billion) from chip sales. June, up 50 percent over last year. Its local competitor, SK Hynix, is also expected to announce a jump of 74 percent to a record 5.4 billion won.
Hynix publishes its results on July 26, Samsung on July 31 and Japan's Toshiba Corp on August 8 [REUTERS
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