Entering 2023, the market situation of memory chips is still not optimistic. There are too many chips in the warehouse, customer orders are reduced, and product prices have plummeted.
Earnings at Samsung's memory business fall
On January 31, Samsung Electronics announced its financial results for the fourth quarter and fiscal year 2022. As of December 31, 2022, Samsung's fourth-quarter consolidated revenue was 70.46 trillion won and operating profit was 4.31 trillion won. For the full year 2022, it reported annual revenue of 302.23 trillion won and operating profit of 43.38 trillion won.
Samsung said the business environment deteriorated significantly in the fourth quarter as the global economic slowdown reduced demand.
Earnings in the memory business fell sharply as prices fell and customers continued to adjust inventories. According to the financial report, the revenue of the Samsung DS division in the fourth quarter was 20.07 trillion won, of which the revenue of the memory business was 12.14 trillion won, which decreased both quarter-on-quarter and year-on-year.
Looking ahead to the first quarter of this year, Samsung said its semiconductor business will focus on actively responding to demand for high-end products such as DDR5, LPDDR5x and 200-megapixel (MP) image sensors amid a weak memory market and reduced global IT demand.
For the full year 2023, while macroeconomic uncertainty is expected to persist, Samsung expects demand to begin to recover in the second half of the year, mainly in the HPC and automotive industries. The semiconductor business will continue to consolidate its market and technology leadership and expand the proportion of advanced nodes and products, such as DDR5, LPDDR5x and Gate-All-Around (GAA) processes.
In terms of capital expenditure, Samsung's total capital expenditure in 2022 will reach 53.1 trillion won, including 47.9 trillion won for semiconductors and 2.5 trillion won for displays. Spending on memory is focused on investing in P3 and P4 infrastructure to prepare for mid- to long-term bit supply.
Micron: Reduce capital expenditure and production capacity, market demand gradually improves
Previously, Micron Technology announced its financial report for the first quarter of fiscal year 2023 as of December 1, 2022, with revenue of US$4.1 billion, a decrease of 39% month-on-month and a year-on-year decrease of 47%.
Micron said it expects industry-wide profitability to be challenged throughout the year given the severe supply-demand mismatch heading into 2023. Micron President and CEO Sanjay Mehrotra said Micron is taking decisive action to cut supply and expenses.
Among them, Micron's capital expenditure in fiscal year 2023 will be reduced to between US$7 billion and US$7.5 billion. FY2023 wafer fab equipment (WFE) is expected to decline by more than 50% year-over-year. In terms of production capacity, Micron's DRAM and NAND wafer starts decreased by about 20%. In terms of advanced technology, Micron decided to slow down the production speed of 1β, 1γ will also be delayed until 2025, and the next NAND node with more than 232 layers will also be postponed.
Looking ahead to future memory market developments, Micron expects memory demand trends to gradually improve over the next few months as customer inventory levels further increase, new CPU platforms are launched, and market demand begins to grow as the economy reopens.
Micron expects that the demand of the DRAM industry will increase by about 10% in 2023, and the demand of the NAND industry will increase by about 20%.
Micron expects that the demand of the DRAM industry will increase by about 10% in 2023, and the demand of the NAND industry will increase by about 20%.
