Global Storage Industry Enters Robust Recovery, Samsung and SK Hynix Report Outstanding Performance
Recently, the global storage industry has ushered in a strong recovery, with prices of multiple product lines surging and related enterprises delivering remarkable performance. The market structure is expected to undergo long-term changes.
Samsung Electronics achieved explosive performance in the third quarter. Its sales volume reached 86 trillion won (approximately 8.5 billion US dollars), representing an 8.7% year-on-year increase and a 159% quarter-on-quarter growth. The operating profit stood at 12.1 trillion won, up 31.8% year-on-year, all setting impressive records. Among its business segments, the Semiconductor Division (DS Division) made a significant contribution, with an expected operating profit of about 5 trillion won, more than ten times that of the second quarter. The smartphone business also grew due to the strong sales of the Galaxy Z Fold7. In response, institutional investors raised Samsung’s target price by 20% to 120,000 won, maintaining a “buy” recommendation. So far this year, Samsung’s stock price has risen by approximately 80%.
SK Hynix also delivered outstanding results. Institutions increased its target price by 28% from 430,000 won to 550,000 won and designated it as the top pick in the industry. It is estimated that SK Hynix’s third-quarter sales will reach 24.8 trillion won and operating profit 11.6 trillion won, with its HBM, DRAM, and NAND businesses all serving as key growth drivers. The market believes that SK Hynix is undervalued in the AI hardware sector, and there is potential for a revaluation of the entire storage industry.
A rare phenomenon has emerged in the storage industry: prices of the four major product lines—DRAM, NAND Flash, SSD, and HDD—are all on the rise. This is attributed to the massive procurement by cloud service providers for AI and data center construction, which has led to product shortages and price hikes. Industry insiders predict that this period of prosperity will last for at least 4 years. The three major original equipment manufacturers (OEMs) have shifted their production focus to high-margin DDR4 and HBM products, and the supply gap of DDR4 is expected to persist for about 2 years.
Taiwan-based company Team Group has also benefited from the industry’s recovery. Its revenue in September reached 1.946 billion New Taiwan dollars, a 107.8% quarter-on-quarter increase and a 64% year-on-year growth. Although its cumulative revenue in the first three quarters was 14.08 billion New Taiwan dollars, a 15.55% year-on-year decrease, signs of recovery have become evident. Team Group has adjusted its inventory management strategy to adapt to market changes, and future adjustments in storage product prices and production capacity will continue to impact its performance.
Currently, the demand in the storage industry remains strong, and the market structure is undergoing structural changes. Enterprises with advantages in products and production capacity will be more competitive, and the future development of the industry deserves continuous attention.