Memory chip makers expect supercycle until 2023

Thursday, August 5, 2021

A so-called supercycle for global memory chip availability, combining price increases and supply shortages, will continue through 2023. As a result, the world’s largest memory chip makers, Samsung Electronics and SK hynix, expect record profits over the next two years. In their latest report, market watchers IC Insights expect global memory chip sales to rise 23 percent this year to $155.2 billion. Next year, the analysts expect a 16 percent increase to $180.4 billion, with a further 23 percent growth forecast for 2023 to a total of $219.6 billion. Memory chips, like many other electronic components, are among the products that potentially need to be KC certified in order to be imported and distributed in Korea.

The previous highs for memory chip sales of $163.3 billion came in 2018, when there was already a so-called memory supercycle. At that time, companies benefited from rising prices due to higher demand. A year later, however, the market collapsed with a 32 percent decline to $110.4 billion, ushering in a downward trend.

This year, due to rising demand from IT products, expansion of cloud data centers and the rapidly recovering global economy, demand for DRAM memory and flash memory has skyrocketed, drawing global supply concerns. According to IC Insights, DRAM memory accounts for 56 percent of the total memory market, while flash memory is at 41 percent. Due to the high global demand, analysts upgraded the profit forecasts of Korean chip giants Samsung Electronics and SK hynix for this year.

Samsung is the world’s largest DRAM chipmaker with 42 percent market share, followed by SK hynix with 29 percent. Samsung is also number one in flash memory chips, with 32 percent market share. SK Hynix, whose market share for flash memory was 9.9 percent in 2019, could move to second place after the completed purchase of Intel’s flash memory division and have about 20 percent market share.

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