"Memory prices likely to exceed forecasts... Samsung and SK hynix expansions create a tailwind for materials and equipment companies" — Hana Securities

[Financial News] Memory prices, including those of DRAM and NAND flash memory, are expected to rise more sharply than initially forecast. As major memory makers, including Samsung Electronics and SK hynix, are expected to continue making large-scale capacity expansions, semiconductor materials, components, and equipment companies are also likely to benefit.
Kim Rok-ho, an analyst at Hana Securities, said in a research report on the 21st, "The memory market continues to show a very solid trend." He added, "DRAM and NAND prices in the third and fourth quarters are both expected to slightly exceed our previous forecasts." He further noted, "A slowdown in the size of the price increases was already incorporated into our assumptions," adding, "What matters is whether the increases can exceed expectations."
Continued strength in memory prices is expected to reinforce the earnings recovery at domestic memory makers. Analysts say the trend in memory prices is important enough to offset some of the pressure that falling exchange rates may place on earnings. Kim emphasized, "An upward revision to memory prices is far more important than a downward revision to earnings estimates caused by falling exchange rates."
An improvement in market conditions could also affect the semiconductor materials, components, and equipment sector through increased capital spending by memory makers. When semiconductor companies such as Samsung Electronics and SK hynix expand production capacity, demand for equipment rises. In fact, some global equipment makers have recently seen delivery schedules pushed back amid capacity expansions by semiconductor companies, according to analysts.
Kim added, "Forecasts for the semiconductor equipment market have continued to be revised upward amid large-scale capacity expansions by semiconductor companies." He explained, "Amid the wave of major capacity expansions, the ability of equipment makers to secure cleanroom space and components could become increasingly important."
Export trends are seen as a key indicator for gauging the strength of market conditions going forward. Regarding the provisional September export figures to be released that day, Kim said, "As the base from the same month of the previous year gradually rises, the size of the increase from the previous month will remain important." He explained that the data is important because it will help determine whether memory prices can maintain their upward trend and exceed expectations in terms of the size of the increase.

[email protected] Lim Soo-bin Reporter