Samsung Electronics Vice Chairman: Memory Chip Market Begins to Show Signs of Recovery

Kim Ki-nam, vice chairman of South Korean giant Samsung Electronics, said on Tuesday that the memory chip market was beginning to show signs of improvement, making it necessary for Samsung Electronics to carefully consider the start-up time of its second-quarter memory chip plant in Pyeongtaek, Gyeonggi. “There are signs that the market is recovering,” the Vice Chairman of Samsung Electronics told reporters at the CES show in Las Vegas. But it is hard to predict how much the market has recovered, and it is difficult to predict what factors will play a role. ”

Samsung Electronics Vice Chairman: Memory Chip Market Begins to Show Signs of Recovery

Samsung’s second memory chip production plant, the equivalent of 400 football fields, is about to be completed, and it plans to start production this year. Chip prices are likely to stabilize in the first quarter of this year and recover in the second, according to a report by the Hana Institute of Finance.

Kim said Samsung could soon decide when to start its second memory chip factory in Pyeongtaek, based on market trends. “We will make decisions based on changing market conditions and our (business) arrangements,” he said. As for whether the factory will produce a large number of advanced NAND chips, Kim said: “It also depends on market conditions.” ”

Samsung Electronics’ semiconductor business is expected to rebound in the first half of the year, ending last year’s decline, the company said in a preliminary financial report released Wednesday.

Earlier today, Samsung announced that it had generated sales of 59 trillion won ($50.2 billion) in the fourth quarter of 2019 and an operating profit of 7.1 trillion won.

The company’s sales and operating profit fell 0.46 percent and 34.26 percent, respectively, due to chip demand and falling prices.

For the full year of 2019, the company’s operating profit fell 52.95 percent year-on-year to 27.71 trillion won, while revenue fell 5.85 percent year-on-year to 22.952 billion won. It was the company’s lowest operating profit since 2015 and its lowest since 2016.

Market watchers said weakness in the chip market was expected to ease as early as the first quarter of this year, and noted that Samsung’s fourth-quarter earnings forecast slightly exceeded market expectations.

The semiconductor industry is now showing signs of recovery, and demand for smartphones has picked up thanks to the introduction of 5G services and foldable-screen phones. Some analysts expect Samsung’s operating profit to rise as high as 40 per cent this year.