Samsung, Micron and SK Hynix may face huge loss due to overstock of Memory IC

Since 2006 till now, the global market price of Memory IC has created the lowest record, due to the economic downturn of semiconductor industry and dramatic decreasing demand of end-users. 

The financial statement of Tier 1 Memory Manufacturers performed poorly. According to the quarterly report, in Q4 of 2022, the profit of Samsung’s IC business (DS business group) is KRW 270 billion, year-on-year plunging 97%. SK Hynix has created the biggest quarterly loss record ever. These 2 leading South Korean companies may face the deficit of KRW 7.58 trillion in integrated circuit business in Q1, reported by <The Korea Herald>. 
At the meantime, the net loss of Micron Technology in Q1 of 2023 is 200 million dollars, comparing with the net profit of 2.3billion dollars in same quarter of last year.  

As reported by other authority, the manufacturers lose in every single memory IC they produced. The overall financial loss in 2023 may break the historical record and reach 5billion dollars.  

Samsung remained the production line in last months, for some reasons like capturing market share from competitors, which results in the increasing stock value of KRW 52.2 trillion. While it will slow down the production to a “meaningful level” so far, due to the overstock that influences the pricing and profit. 
By contrast, its main competitors like SK Hynix and Miron went on the opposite way. They have been reducing the production since long time ago, to avoid the overstock circumstance.

Both SK Hynix and Mircon emphasis that, the speed of chip market’s recovery depends on the efforts by peers to cut supply. Recently, Samsung has also reduced the production. Perhaps this action will accelerate the recovery of chip market as expect.