TrendForce: 2022Q3 Global DRAM Revenue Declines Nearly 30% QoQ
TrendForce released a new survey report showing that the revenue of the entire DRAM industry in the third quarter of 2022 fell by 28.9% quarter-on-quarter to $18.19 billion, the largest drop since the 2008 financial crisis. As the demand for consumer electronics continues to slump, the contract price of DRAM in the third quarter of 2022 will fall by 10% to 15% from the previous quarter. Even for server DRAM, where shipments have been relatively stable, demand slowed from the previous quarter as buyers adjusted inventory levels.
The top three DRAM manufacturers in the market all experienced a decline in revenue in the third quarter of 2022. Samsung’s revenue was $7.4 billion, a 33.5% decrease from the previous quarter, the largest decline among the top three; SK Hynix was $5.24 billion, down 25.2% month-on-month; Micron’s figure is about $4.81 billion, and the quarter-on-quarter decline will be smaller due to the fact that the accounting method for the fiscal quarter is different from that of the other two manufacturers. Although the operating profit margins of these three manufacturers are still maintained at a relatively high level, this year’s inventory adjustment period will continue until the first half of next year, and profits may continue to be squeezed.
Samsung has slowed down its plans to shift production capacity from DRAM to CMOS image processors because demand for the latter is also declining, and a new fab will be put into operation next year, which will slow down its technology migration and limit production capacity given the slower than expected destocking speed increase. SK Hynix, like Samsung, also controls production capacity by slowing down technology migration. Micron’s expected increase in production capacity in 2023 is the smallest among the top three manufacturers. In order to cope with the decline in profit margins, there is the possibility of further production reduction.