This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Samsung’s Memory-Price Hangover Will be Manageable
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Markets > Samsung’s Memory-Price Hangover Will be Manageable
Markets

Samsung’s Memory-Price Hangover Will be Manageable

Editorial Board Published October 8, 2021
Share
Samsung’s Memory-Price Hangover Will be Manageable
SHARE

Memory-chip companies rode the Covid-19 wave to record highs. Now that wave has crested and companies will need to figure out how to navigate the trough. Samsung Electronics, with its diversified businesses and market leadership, may weather it better than most.

Memory-chip stocks have retreated substantially from their peaks earlier this year. Samsung is down 21% since January, while SK Hynix is 37% lower than its February peak. Both are still reporting stellar results: Samsung said Friday that its revenue for last quarter could reach a record of the equivalent of $61 billion, while its operating profit would be the highest in three years.

The worry is that heightened demand for electronic devices such as personal computers and smartphones may be coming to an end. Spot prices for DRAM, a memory chip for processing, have come off since April. While big suppliers like Samsung don’t base their sales on spot prices, weaker prices there could eventually hurt contract prices, too. Market researcher TrendForce expects DRAM contract prices to fall 3% to 8% this quarter from the last.

Demand for personal computers, which got an unusual bump from the pandemic, may return to a more normal level quite soon. Goldman Sachs expects PC shipment to fall 12% year over year in 2022. Slowing economic growth in China, the largest smartphone market, may also dent memory-chip demand from mobile devices. And global trade growth as a whole is beginning to slow as well: Volumes have been edging down since March, according to Oxford Economics.

Even prices for memory chips used in servers could suffer a rare decline as cloud companies have been snapping up chip supply aggressively in the past few quarters and now look well stocked. TrendForce estimates that cloud service providers in North America and China have more than eight weeks worth of server DRAM inventory. Component shortages in other parts of the supply chain may have also hurt the build-out of data centers.

The question for investors is how long and how deep the downturn will be. Memory-chip price cycles have lasted around two to three quarters in the past couple of years, according to Goldman Sachs. That is a shorter cycle compared with previously. One reason is that the industry has become more consolidated, especially on the DRAM side, while new sources of demand like cloud servers have helped smooth the cycle. Customers may also prefer to hold more inventory after the disruptions experienced in the past couple of years.

After a plunge this year, Samsung shares have priced in a big part of the slowdown already—although the worst of the chip price fall is probably yet to come. That will inevitably mean a rougher few quarters for the company. But Samsung’s other large businesses like form foundry and telecom equipment could help soften the blow compared with smaller rivals. In the long run, the company still looks like a formidable competitor.

Write to Jacky Wong at [email protected]

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

TAGGED:MarketsPAIDWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article Private Prisons Still Make Money From Federal Inmates Despite Biden’s Order Private Prisons Still Make Money From Federal Inmates Despite Biden’s Order
Next Article Global Tax Reform Isn’t Yet a Done Deal Global Tax Reform Isn’t Yet a Done Deal

Editor's Pick

Brooke Hogan Written Out of Hulk’s Will (At Her Personal Request)

Brooke Hogan Written Out of Hulk’s Will (At Her Personal Request)

Studying Time: 3 minutes Brooke Hogan isn’t in her dad’s will, a brand new report reveals. Regardless of years of…

By Editorial Board 4 Min Read
6 Greatest Underwear To Stop Chafing For Males in 2025 | Fashion
6 Greatest Underwear To Stop Chafing For Males in 2025 | Fashion

We independently consider all really helpful services. Any services or products put…

15 Min Read
Seersucker: What It Is, Why You Want It & How To Put on It | Fashion
Seersucker: What It Is, Why You Want It & How To Put on It | Fashion

We independently consider all advisable services. Any services or products put ahead…

14 Min Read

Oponion

The Warriors have discovered their beginning lineup

The Warriors have discovered their beginning lineup

SACRAMENTO — In a season wherein the Warriors have used…

February 22, 2025

Disney continues custom of honoring American army with patriotic celebrations

Disneyland is internet hosting the first…

July 6, 2025

North Carolina vote problem depends on principle election deniers name excessive

Republican Jefferson Griffin narrowly misplaced his…

December 26, 2024

Oklahoma conquers ’24 demons, wins NCAA gymnastics title

Apr 19, 2025, 08:27 PM ET…

April 20, 2025

20 Most Snug Sneakers For Males In 2024 | Fashion

Consolation and magnificence didn’t use to…

September 24, 2024

You Might Also Like

Microsoft joins unique T market cap membership after AI surge, becoming a member of just one different firm
Markets

Microsoft joins unique $4T market cap membership after AI surge, becoming a member of just one different firm

Angelo Zino, a CFRA Analysis senior fairness analyst, discusses the efficiency of Microsoft, Meta and the general tech sector within…

4 Min Read
Moderna plans to slash 10% of workforce as COVID shot gross sales gradual
Markets

Moderna plans to slash 10% of workforce as COVID shot gross sales gradual

Rep. Russell Fry, R-S.C., discusses the Home probe into Pfizer’s launch of COVID vaccine outcomes and extra on ‘Varney &…

3 Min Read
Figma goes public, and the CEO was a fellow at Peter Thiel’s basis
Markets

Figma goes public, and the CEO was a fellow at Peter Thiel’s basis

‘Making Money’ host Charles Payne discusses whether or not the inventory market is a coiled spring able to explode or…

5 Min Read
Zuckerberg needs to offer everybody their very own private superintelligence via Meta’s new imaginative and prescient
Markets

Zuckerberg needs to offer everybody their very own private superintelligence via Meta’s new imaginative and prescient

Meta CEO Mark Zuckerberg on Wednesday introduced the tech large will give attention to growing a private superintelligence for everybody, which…

4 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?