The super cycle in global memory chips, where price strengthening is coupled with demand overwhelming supply, is expected to last until 2023 to feed record earning streak for the world’s two top memory makers Samsung Electronics and SK hynix over the next two years.
Global industry tracker IC Insights forecast in its latest report that global memory chip sales will jump 23 percent on year to $155.2 billion this year, 16 percent to $180.4 billion in 2022 and another 22 percent to $219.6 billion in 2023.
The highest-ever global memory sales were $163.3 billion in 2018 during the so-called super memory cycle, when chip makers benefited from price hikes on rising demand. The global sales figure nosedived 32 percent in 2019 to $110.4 billion as the market entered the down cycle.
But a surge in IT devices, expansion of cloud data centers and faster-than-expected economic recovery from the Covid-19 crisis due to vaccine rollouts across the world have rapidly stirred demand for both DRAM and NAND, resulting in chip supply shortages worldwide.
This year, DRAM is projected to account for 56 percent of global memory chip sales, and NAND flash 41 percent, according to IC Insights.
The recent upturn in chip demand raises expectations for strong earnings of Korean chip giants Samsung Electronics and SK hynix this year.
Samsung is world’s largest DRAM chip maker with a 42 percent share and SK hynix is No. 2 with a 29 percent share.
Samsung is also No. 1 in the global NAND flash chip market, boasting a 32 percent share. SK, which held 9.9 percent share of the global NAND flash market in 2019, is poised to jump to No. 2 with a near 20 percent share soon as it is close to complete its acquisition of Intel`s NAND flash business.
On Friday, shares of Samsung Electronics are trading up 1.13 percent at 80,400 won ($71.30) and those of SK hynix down 0.41 percent at 122,000, as of 11:24 a.m. in Seoul.
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