Samsung, SK Hynix and Micron to Face Revenue Drops in Q1 2019

AlphaAtlas

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Digitimes claims that Samsung Electronics, SK Hynix, and Micron Technology, the world's top 3 memory manufacturers, saw their Q1 2019 revenue drop dramatically. Combined DRAM and Flash revenue was down 18% sequentially and 26% "from a year earlier in the fourth quarter of 2018." The big 3 manufacturers have reportedly tried to cut production volume in an effort to stabilizes prices (and revenue), and they were even slapped with multiple antitrust lawsuits last year over allegations of supply collusion. But even those cuts aren't enough to curb outside factors, and DRAM and flash prices are still dropping like a rock.

Their combined revenues from DRAM slipped 17% sequentially and those from flash memory dropped 20% in the fourth quarter. DRAM accounted for 70% of the top-3 vendors' combined revenues in the fourth quarter, a percentage similar to that of the previous quarter. As memory's prices remain in a decline, with clients taking a conservative attitude about building inventory, the vendors' revenues from the memory business are expected to continue weakening in first half of 2019 and are unlikely to regain growth until demand starts recovering from the server and smartphone sectors, driven by specification upgrades and price cuts in the second half of the year. The top-3 vendors' revenues for the first quarter of 2019 are expected to fall another 26% on quarter and 29% on year as they decelerate their production and capacity expansion plans, according to Digitimes Research.
 

GoodBoy

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Yeah, I was under the impression that for years, DRAM has been significantly overpriced... so all it is doing is normalizing somewhat. Good for us, bad for greedy corporations. And they are still going to have big profit margins.
 

Seventyfive

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This is already pretty well known. Micron will be weak first calendar half of this year with prices normalizing later in the year. Part of the inventory build was that Intel was having a CPU shortage which meant people couldn't build new computers at the rate they wanted to which let for DRAM to pile up.
 

daglesj

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I got real lucky as I bought my 4x4GB DDR4 3000 set in May 2016 for £80! It's been stuck at £200 or close since about July 2016.

No tears.
 

Seventyfive

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Is this why micron is up 50% since day before christmas stock price?

Everything that had a volatile year got hit going into the end of the year on tax loss selling. now it's up on rumors the china trade talks will be wrapping up soon.
 

oldmanbal

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anytime you hear sk hynix, think NVIDIA as they are essentially their largest investor.
 

Uvaman2

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QUICK!, get everyone into DDR5, then slow walk that shit, and milk those suckers for the next 6 years!!! /s

(notice how DDR5 becomes more of a thing, as prices finally drop on DDR4)
 

Lakados

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I have spent more time this month than I care to admit to trying to source a dozen or so 16GB DDR4 3200 chips. Every time I get a quote from one of my suppliers and approve it I get a call back a few days later letting me know it’s been discontinued and they can’t source it. I have workstations to upgrade and a budget to do it, will one of these guys just start shipping a product so they can take my money.
 
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A revenue drop for them should come from heavy fines. One years worth of profits should be the right amount to make them never collude again.
 
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Dont feel sorry for them. Seems all get slap on wrist for price fixxing. Should increase fines as they routinely jack up price. Defitely a pattern.
 
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Zarathustra[H]

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A revenue drop for them should come from heavy fines. One years worth of profits should be the right amount to make them never collude again.


Problem is that fines for this sort of thing are always so small that they become a cost of doing business.

Who cares if you pay a $10M fine, if you boosted revenue by $500M through the illicit practice. I don't understand how anyone thinks this is ever going to change as long as this is the case.

The dines need to really sting, and make the shareholders sit up and take notice.

IMHO, the minimum fine from any financial misconduct should be the increased revenue earned from said misconduct, with a 2x-3x multiplier for "punitive damages".

This should make them think twice.
 

Zarathustra[H]

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I have spent more time this month than I care to admit to trying to source a dozen or so 16GB DDR4 3200 chips. Every time I get a quote from one of my suppliers and approve it I get a call back a few days later letting me know it’s been discontinued and they can’t source it. I have workstations to upgrade and a budget to do it, will one of these guys just start shipping a product so they can take my money.


Sounds like someone needs to set you up with an expense card, so you don't need to go thorough a bureaucratic and slow purchase order process.
 

Lakados

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Sounds like someone needs to set you up with an expense card, so you don't need to go thorough a bureaucratic and slow purchase order process.
I have one but I need to find somebody who sells them and has them in stock and can ship to Canada. I can get 8GB no problem or I can get 16GB at 3000, but they all seem to have problems with 16GB at 3200.
 

aaronspink

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Maybe they will learn that artifically driving prices up, to increase profit margins, is not a good long term strategy for moving product.

Hehe, nah,..who am I kidding?

Yeah, I was under the impression that for years, DRAM has been significantly overpriced... so all it is doing is normalizing somewhat. Good for us, bad for greedy corporations. And they are still going to have big profit margins.

DRAM has always followed a feast/famine sequence. demand goes up, prices go up, process improvements/new fabs/new competitors come in, prices freefall, consolidation happens, prices stabilize, demand goes up, rinse and repeat. This has been going on for 40 years at this point.
 
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