Friday, June 2, 2023
TrendForce has reported a dramatic 21.2% quarter-on-quarter (QoQ) decline in the first quarter (Q1 2023) revenues for the DRAM industry, bringing total revenue down to $9.663 billion. This significant dip represents the third consecutive quarter where revenues have fallen.
A closer look reveals that increased shipment volumes were exclusive to Micron Technology Inc., with other suppliers noting a decrease. The ASP fell for all three major suppliers. An enduring oversupply issue, which has led to an ongoing slump in prices, is the chief culprit behind the decline. Nevertheless, the industry expects a gradual slowing in the rate of price decline following planned production cuts. TrendForce’s Q2 forecast suggests a rise in shipments, but the ongoing price fall might limit potential revenue growth.
Each of the three major suppliers—Samsung, Micron, and SK hynix—reported a drop in quarterly revenue. Samsung saw a decline in both shipment volumes and ASP due to fewer orders for its newly launched devices, resulting in a QoQ decrease in revenue of 24.7%, amounting to about $4.17 billion.
Benefiting from its earlier financial reporting and the tail-end orders of the previous year, Micron climbed to the second position in Q1 2023. Despite being the only supplier among the big three to record positive shipment growth, Micron couldn’t avoid a minor 3.8% revenue decline, taking its total down to $2.72 billion.
SK hynix faced the steepest decline, with more than a 15% drop in both shipment volume and ASP, leading to a drastic 31.7% plunge in revenue, amounting to approximately $2.31 billion.
TrendForce’s earlier prediction of the big three shifting from profitability to loss in 1Q23 due to a swift ASP decline came true. With DRAM prices continuing to fall, it’s anticipated that Q2 operating profit margins will remain in the red. In response to this, all three major suppliers have started implementing production cuts, with Q2 capacity utilization rates expected to fall to 77% for Samsung, 74% for Micron, and 82% for SK hynix.
In terms of Taiwanese suppliers, Nanya faced a decline in shipments for the fourth consecutive quarter, with Q1 revenues dropping by 16.7%. Mainstream process nodes remained stagnant at 20 nm, lagging behind the big three, leading to a substantial decline in operating profit margins to -44.9%.
However, there is a glimmer of hope as the replenishment demand for TV SoC inventory is anticipated to lift the Q2 utilization rate back up to 80% from 70%. Despite receiving several emergency orders for laptops and TVs in Q1, Winbond reported an 8.8% decline in revenues as prices continued to fall.
Amid falling prices and sluggish demand, PSMC experienced a 12.3% dip in its quarterly DRAM revenue. The company’s financial performance is primarily tied to its own consumer DRAM products, excluding the revenue from its DRAM foundry services. However, if the foundry service revenue were to be included, the company’s quarterly decline would steepen to 22.6%.
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