The semiconductor market, which has been traveling for super cycles for the past two years, is expected to enter the cold season in the second half of this year. Semiconductors, which have been showing prices so far, have been reduced as demand decreases and inventory has increased. In particular, the cuts of memory prices are the most serious. The semiconductor industry has reduced its facility investment in preparation for the industry, and started to tighten the belt.
Semiconductor sales in the world … Preliminary for prolonged demand for demand
The global semiconductor sales in September declined for the first time in two years and eight months since January 2020. According to the US Semiconductor Industry Association (SIA) on the 1st, the global semiconductor sales amounted to $47 billion in September, down 3% from the same month ($48.8 billion) last year. This figure shows the three-month average of semiconductor monthly sales compiled by the World Semiconductor Trade Statistics (WSTS).
In particular, the decline in Asia is the largest. By region, semiconductor sales in September decreased in the Asia-Pacific (-7.7%) and China (-14.4%) year-on-year, while Europe (12.4%), the Americas (11.5%), and Japan (5.6%) increased.
Memory fixed trading prices are continuously falling this year. Fixed trading prices refers to the amount of contract transactions between companies and shows the market situation in relation to the supply of semiconductor.
According to the market researcher DRAM Exchange on the 31st, the fixed transaction price of the DRAM PC (DDR4 8 GB) for DRAM PCs in October, the fourth-quarter contract, fell 22.46% from the previous month ($2.85).
This is in contrast to the surge in DRAM fixed transaction prices in April last year. The DRAM fixed trading price peaked at $4.10 last July, and then $3.41 in January this year, $3.35 in May (-1.76%), $2.88 in July (-14.03%), 2.85 on August 2.85 It continued to fall in the order of dollars (-1.04%).
The top three DRAM suppliers have been aggressively negotiated with PC OEM companies since early October when the top three DRAM suppliers faced sluggish demand. said. The top three DRAM sales are Samsung Electronics, SK Unix and Micron.
Trend Force is currently diagnosed that it will not be able to prevent the continuous decline in the spot price of the PC DRAM and the contract price. ▲ The overall demand stagnation is prolonged, ▲ DRAM supplier’s inventory level is higher than in the third quarter, and the inventory level of PC OEM is high.
NAND flash prices are also serious. In October, NAND prices fell 3.73% from the previous month to $4.14. Normally, fixed transaction prices fluctuated in the first month of the quarter, and the price of NAND has been unusually falling for five consecutive months since June. It fell in June (-3.01%), July (-3.75%), August (-1.67%), and September (-2.55%).
Trend Force said, NANNY has a sharp increase in price due to rapid oversupply. In the situation where the global economic outlook is uncertain, the demand for home appliances and PCs is unlikely to rebound in the short term, he said.
Tightening management and tightening management
Due to sluggish demand, major semiconductor suppliers have also begun to tighten all-time tightening by reducing the demand for semiconductors.
In the memory industry, SK Unix said in a 3Q earnings announcement on the 26th of last month that it decided to reduce its investment by more than 50% this year (10 trillion won) this year. This is comparable to reducing investment in industry facilities in 2008-2009, which was a financial crisis.
Micron, the third-largest DRAM share, announced that it will reduce its investment in facilities next year by more than 30%. Kiosk, the third-largest NAND share, will reduce the wafer input by 30% from October this year.
Intel plans to reduce $3 billion in operating costs next year in the 3rd quarter earnings announcement and reduce the operating budget of $8 billion to $10 billion by 2025. This year, facility investment lowered 8% of the previous plan.
Earlier this year, market research firm IC Insists forecasts the global semiconductor market facility investment this year to $185.5 billion (about 262.7 trillion won), downward from March forecasts ($190.4 billion). As the demand for semiconductors decreased due to the shrinking consumer market, and inventory rose, facility investment was also inevitable.
On the other hand, Samsung Electronics, the No. 1 memory market, shows a different move. Samsung Electronics announced on the 27th that it will proceed as planned without reducing semiconductor investment to respond to long-term demand. This is different from what he shared with competitors in 2019.
The semiconductor industry is concerned about the possibility of chicken games. Nam Gung-hyun, a researcher at Shanahan Securities, said, Unlike Samsung Electronics, other companies, Samsung Electronics chooses a strategy for expanding the quantity, Samsung Electronics. I can.