Memory Market “Is currently in a free-fall”
16 September, 2022
IC Market growth forecast was downgraded to 7%, almost entirely due to the collapse of the memory market. Samsung’s co-CEO: “The second half of 2022 looks bad"
IC Insights reduced its worldwide IC market growth forecast for 2022 from 11% to 7%. The downgraded expectation is almost entirely due to the collapse of the memory market in the second half of 2022. In a recent report, the company writes: “It was as though someone flipped a switch to the off position for the memory market beginning in June.”
In early September, Kyung Kye-hyun, Samsung’s co-CEO and head of its semiconductor unit said, “The second half of this year looks bad, and as of now, next year doesn’t really seem to show a clear momentum for much improvement.”
Many memory companies have attributed the swift downturn to a massive inventory adjustment currently underway by their customers, and expect this inventory adjustment period to extend into 2023. For example, when Micron’s fiscal 3Q ended in May, the company gave an early warning of the coming developments in the memory market: It presented 4Q (ending in August) sales guidance of -17%, and later revised this figure to at least a 21% drop in sales.
Western Digital, a major NAND flash memory supplier, commented in its 2Q conference call, that the inventory adjustment currently underway is “definitely very, very sharp in the quarter we are in (3Q22).” Western Digital’s outlook is for a company-wide sales decline of 18% this quarter. With hard disk drives (HDDs) making up about half of the company’s sales and expected to show only a modest decline in 3Q, IC Insights believes that its NAND flash business is likely to register a drop of at least 20% this quarter.
Taiwan-based Nanya is a relatively minor player in the global DRAM market, but its monthly sales data provides some insight into how swiftly the DRAM market can shift gears from boom to bust. The company’s August 2022 DRAM sales were 39% of what they were in August 2021 – and down 53% from March 2022 sales – just five months ago!
With the memory market currently in a free-fall, IC Insights expects foundry giant TSMC to surpass Samsung and take over the top spot in the semiconductor company sales ranking in 3Q22: Intel is expected to move to the third position (beneath Samsung) in the ranking, with 3Q22 sales that are 26% less than TSMC’s.
Posted in: News , Semiconductors
Posted in tags: Memory , semiconductors