Electronic Components Forecast: SK Hynix & Samsung Prospects

According to a recent market analysis conducted by Xinhan Investment Securities, SK Hynix is projected to report a deficit of 2.3 trillion Korean won in the third quarter. However, this anticipated loss reflects a narrowing trend compared to the deficits incurred in the first quarter (3.4 trillion Korean won) and the second quarter (3 trillion Korean won).

Similarly, KB Securities estimates that Samsung Electronics' semiconductor business is expected to face a loss of 1.9 trillion Korean won in the third quarter. Encouragingly, the fourth quarter is anticipated to witness a reversal of this trend, signaling a return to profitability. While challenges persist in the third quarter, a progressive improvement is foreseen when compared to the deficits observed in the first quarter (4.6 trillion Korean won) and the second quarter (estimated 3.8 trillion Korean won).

Industry experts, as reported by the Korea Times, have highlighted the significant developments in the memory chip industry, propelled by the successive releases of cutting-edge chips by Nvidia, Intel, and AMD. This favorable landscape holds substantial promise for SK Hynix and Samsung Electronics, who are crucial partners to these three prominent chip manufacturers. Notably, the rise of AI chip demand is expected to positively impact the stock prices of these Korean enterprises, indicating a prosperous outlook.

As the demand for GPUs used in artificial intelligence computations and CPUs utilized in high-performance computing continues to surge, the necessity for complementary storage chips, including SDRAM and HBM, becomes apparent. Notably, leading GPU manufacturers such as Nvidia and AMD have seamlessly integrated high-capacity 3D stacked flash memory and HBM cache chips into their products. Statistical data compiled by Jibang Consulting underscores SK Hynix's commanding 50% share in the global HBM market, while Samsung enjoys a substantial 40% share.

Furthermore, with the recent launch of advanced server processors by Intel and AMD, there is a gradual transition towards DDR5 memory in server systems. This transition, in turn, stimulates the demand for DDR5 memory chips, amplifying market opportunities for electronic components distributors.

Noteworthy market observations indicate that the surging demand for GPUs has yielded positive implications for storage manufacturers, igniting growth in the HBM3 chip sector. Hynix, for instance, spearheaded the mass production of HBM3 in 2022, and Samsung Electronics is poised to commence mass production of this chip in the current year. Consequently, this robust and stable demand presents the potential to reshape the landscape of the memory chip industry, mitigating its previous downturn. Expert analysis from Korean securities analysts suggests that the second half of the year will witness a rebound in storage chip prices, driven by the combined force of HBM3 and DDR5 technologies.