During the entire first quarter of this year, Samsung Electronics and SK hynix struggled with poor prices for general-purpose memory semiconductors, and expectations are high that their performance will fall short of expectations. Analysts expect a full-fledged semiconductor market rebound beginning in the second quarter, but they anticipate a gradual level of recovery and observe that a dramatic turnaround is unlikely.
According to financial information company FnGuide on the 31st, Samsung Electronics' operating profit for the first quarter of this year is expected to be around 5 trillion won. This figure represents a decline of over 1 trillion won compared to the first quarter of last year (6.6 trillion won) and the fourth quarter of last year (6.5 trillion won). The primary causes of this performance decline are identified as weak memory semiconductor prices and an expanding deficit in the institutional sector of foundry (semiconductor contract manufacturing).
Consolidating reports from major securities firms indicate that Samsung Electronics' Device Solutions (semiconductor) division is expected to report an operating loss of about 400 billion won despite generating over 2 trillion won in profit from the memory business due to large losses incurred in the system LSI and foundry sectors. The core memory business is affected by export regulations on high-bandwidth memory (HBM) to China, and there are concerns that profits may decrease compared to the same period last year due to declines in prices for general-purpose memory products.
SK hynix's first quarter performance is also expected to show a similar trend. Analysts estimate that SK hynix's operating profit for the first quarter will be around 6.5 trillion won. Although this is an increase compared to the first quarter of last year (2.886 trillion won), it is more than a trillion won less than the fourth quarter of last year (8.1 trillion won). The reasons for the performance decline include the drop in prices for general-purpose DRAM and a slight decrease in HBM shipments targeting NVIDIA, one of SK hynix's key customers.
However, starting this month, demand for memory has been increasing, leading Micron, one of the top three players in DRAM, to declare a major price increase, indicating positive signals. Expectations are growing that a "spring for semiconductors" will come starting in the second quarter. Notably, the rebound in prices for general memory semiconductors, excluding HBM, is seen as a positive development. Demand for memory semiconductors as a whole is expected to gradually recover due to increased demand from artificial intelligence (AI) and data centers.
A source familiar with Samsung Electronics noted, "Executives in the Device Solutions division recently told employees that they expect to hit the lowest point in the first quarter, and from the second quarter onward, with improvements in market conditions and technology recovery, growth will enter full swing and performance will improve." They added, "While a V-shaped rebound or dramatic turnaround like in the past is unlikely, we expect to regain operating profits to the level of previous years."
It is anticipated that demand from the largest market, China, will contribute to improving the second quarter performance of Samsung Electronics and SK hynix. Lee Su-rim, a researcher at a Research Institute, said, "The adjustment of mobile DRAM inventory in China is nearing completion, and the spot prices of DDR4 are rising following DDR5," adding, "This first half has definitely entered a period of rising prices." This researcher also explained, "This is because memory companies are maintaining a conservative supply stance, and the absence of supply expansion despite rising prices is stimulating customers' inventory accumulation sentiment."
The price of NAND flash is also expected to enter an upward trend starting in April after a long period of production cuts. Park Kang-ho from DAISHIN SECURITIES stated on the 25th, "NAND flash prices are expected to rise in April, and DRAM prices are stabilizing due to inventory adjustment effects, indicating that recovery in the memory industry will become visible after the second quarter of this year. He further noted, "Proactive inventory accumulation in response to China's 'old for new' policy and U.S. tariff policy is influencing price increases," adding that "the expansion of cost-effective AI infrastructure investments post-DeepSeek is also underway, suggesting that memory demand is likely to exceed previous estimates."