However, 3D NAND flash technology has matured and the cost has been greatly reduced, which will make this year's output growth higher than demand, which will force smaller manufacturers to significantly lower prices to maintain market share.
The average price of NAND flash chips has fallen nearly half from the peak in 2017. Concerns about further declines have caused stocks of major producers such as SK Hynix in South Korea to fall 7% on Monday. NAND flash chips for mobile devices, memory cards, USB flash drives And in the solid state drive.
Alan Chen, head of market research firm DRAMeXchange, said, 'The profit margin is getting lower and lower, mainly because the speed of product cost can't catch up with the decline in average selling price.' He expects that the price will be in the rest of the year. Continue to fall.
Nomura estimates that NAND flash memory chips will grow by about 40% to 50% this year. The global smartphone sales slowdown has led to a decline in market demand, resulting in a NAND flash chip price drop of nearly 20%.
The price of DRAM memory chips has risen by more than 20% this year. DRAM memory chips are used in servers, gaming PCs and cryptocurrency mining machines to process large amounts of streaming data.
However, as China has conducted price surveys on industry giants such as Samsung Electronics, DRAM memory chip prices have lost momentum. In addition, the participation of new competitors will also affect the industry. According to analysis, China's three major storage chip companies - Yangtze River Storage, Fujian Jinhua and Hefei Changxin, will soon be mass production of memory chips.
HI Investment & Securities analyst Song Myung-sup said, 'Until the first half of next year, the production scale of Chinese companies will be small, but as the profit margin increases, the output will increase, which will be the semiconductor market in the second half of next year. Make an impact. '
Andrew Norwood, chief analyst at market research firm Gartner, said that China's entry into the market could be one of the reasons why Samsung is aggressively expanding its production capacity. He said that 'revenue will drop sharply' in 2020 and 2021.
However, optimistic observers say demand for new technologies from data centers, 5G mobile networks and autonomous driving will increase.
Peter Yu, an analyst at BNP Paribas, said in a recent report, 'Although the profit growth momentum may disappear, we believe that the operating profit level of $90 billion can be maintained in 2019, no. There will be a sharp decline. '
'The rich and stable profit will be the new normal of the memory industry.'
Samsung Electronics, the world's largest chip maker, is expected to record a record profit of 12.5 trillion won ($11 billion) from its chip sales in the June quarter, up 50% from a year earlier. Another Korean company Memory chip maker SK Hynix's profit from chip sales is also likely to grow by 74%, reaching a record 5.4 trillion won.
SK Hynix will release its earnings on July 26, Samsung Electronics will report its earnings on July 31, and Toshiba of Japan will announce its earnings on August 8.