Electronics

According to customs data, since the second half of last year, the price and demand of global storage chips have experienced a historic decline, and the storage chip industry is facing a "cold winter".

The global storage chip industry is highly concentrated and presents an oligopoly pattern, led by Samsung, SK Hynix, and Meguiar. Samsung Electronics and SK Hynix, two memory chip manufacturers, account for 70% of the global DRAM market, making South Korea the world's largest memory chip manufacturer. Semiconductors are also one of the most important export commodities of South Korea, accounting for about 20% of its export value, and among the semiconductors exported from South Korea, memory chips are the main products.

Aiji Micro will organize the export situation of storage chips in South Korea and analyze how long the "cold winter" of storage chips will last.

The downward trend continues

According to South Korean customs data, in 2022, the total export value of South Korean memory chips was 61.778 billion US dollars, a year-on-year decrease of 10.7%; The export weight was 3641 tons, up 3.3% year-on-year; The average price decreased by 13.6% year-on-year.

According to customs data, from a quarterly perspective, the decline in South Korea's export volume in 2022 began in the second half of the year, and showed a precipitous decline in the fourth quarter. In Q3 2022, the export volume decreased by 12.3% month on month and 18.4% year on year; In Q4 2022, the export volume decreased by 30.7% month on month and 43.4% year on year. However, the fluctuation of export weight is relatively stable, and there is still an increase in the second half of the year. The decrease in export volume is mainly due to the decline in product prices.

In 2023, the decline in export volume has not stopped. According to customs data, the export volume from January to February 2023 was US $5.102 billion, a year-on-year decrease of 25.4% and 53.0%. According to customs data, the export volume in February 2023 increased on a month-on-month basis, but from a price perspective, it continues to decline.

On March 1, the Ministry of Industry, Commerce, and Resources of South Korea announced that due to shrinking demand and increased inventory, the prices of DRAM, NAND, and system chips have further declined, and semiconductor exports continue to be affected. Chip prices are expected to continue to decline for some time.

Estimated mid year price bottoms out

From the perspective of the downward trend in the export prices of South Korean memory chips in the past decade, there is still no sign of an increase. However, in the long run, the weight of exported chips fluctuates relatively smoothly, with the fluctuation of the total export volume basically proportional to the price fluctuation, and the price fluctuation is cyclical, with a change cycle of about 3-4 years.

In fact, this change cycle is basically consistent with the price fluctuation cycle of DRAM memory chips. This downward cycle has lasted for a year and a half. From a cyclical perspective, it is nearing the end and is expected to reach its bottom in the middle of 2023.

It is worth mentioning that from 2013 to 2022, the top five memory chip exporting countries or regions in South Korea have always been Chinese Mainland, Hong Kong, Taiwan, China, Vietnam and the Philippines, accounting for nearly 95% in total. Among them, the export volume to Chinese Mainland has always ranked first, accounting for about 50%.