Samsung Likely to Hit Record Profits Due to Increased Demand of DRAM Chips

By | 19th September 2017

If you’ve been following the trends in both the smartphone and personal computer space, then you likely know that there is a supply and demand issue happening in regards to memory chips. Due in part by the demand of smartphone components, the demand of memory chips has been increasing over the last year and that trend doesn’t seem to be stopping anytime soon. With Samsung and SK Hynix holding nearly 70% of the global memory semiconductor market, these two companies are poised to make about $42 Billion in profits this year.

If you’ve been wanting to build a computer lately, you likely already know that this isn’t the best time to do so. Cryptocurrency mining has made the price of many video cards go higher than they launched at — that’s if you can find them in stock in the first place. We’re also seeing prices for RAM go up across the board thanks to the supply and demand issue mentioned above. Sure, we don’t see the same types of chips used in computer RAM sticks that we do in smartphones, but it’s those same factories that are producing them.

Desktop computers and mobile phones aren’t the only thing that has caused an increase in demand as of late. Many analysts cite the release of the new iPhone as a big factor here as well. But both Samsung Electronics and SK Hynix have had to convert some of their PC and mobile DRAM production lines to server DRAM lines. So not only are the demands from consumer PCs and mobile causing a strain at these facilities, but there’s also the rapidly rising demand of server DRAM chips.

It can cost a lot of money and time to build a new memory facility too, and if a company overextends then they could end up closing down the plant after the supply and demand issue levels out. Still, companies like Samsung and SK Hynix stand to make a lot of profit this year as they continue to churn out memory chips at increased prices as quickly as possible. Both of these companies are expected to publish record high profits for the third quarter of this year.

Source: Business Korea