 |
By Lee Min-hyung
Stock prices for major semiconductor manufacturers here are on a rapid rise amid signs of a sales rebound despite a recent drop in their valuation due to unfavorable market conditions.
On Monday, shares of SK hynix, the world's second-largest memory chip maker, hit 85,100 won ($72.82), the highest price in 52 weeks, as sales for the firm's major cash-cow DRAM memory chips are expected to increase from the fourth quarter of this year, according to experts.
They expect the chipmaker to post an operating profit of around 460 billion won in the fourth quarter, beating a market consensus of some 400 billion won by a huge margin.
"The company will likely report 463.3 billion won in operating profit between October and December, as DRAM earnings will turn for the better on the back of growing demands from clients particularly from North America," Park Yu-ak, an analyst at Kiwoom Securities, said.
He set a price target of 110,000 won for the firm's stock amid expectations for a rise in DRAM prices.
Shares of Samsung Electronics, the world's largest memory chip vendor, are also seeing an upswing. The company's stock price also hit a high of 53,800 on Monday, the highest price this year.
Analysts said the nation's largest company by market capitalization will continue to improve its valuation next year.
"Starting from the first half of next year, prices for DRAM and NAND flash chips will increase and help the company rapidly improve its profitability," Kim Young-woo, an analyst at SK Securities, said.
Also of note is Japan's recent decision to approve exports of three key materials in use for manufacturing semiconductors to Korean companies.
On Sunday, the Japanese government permitted the export of the materials ― photoresist, fluorine polyimide and etching gas ― to the Korean companies, in what is widely seen as a positive sign for the chipmakers to stabilize their supply capacity.
Tokyo imposed the trade restrictions in July, as part of a supposed form of economic retaliation against Seoul amid their worsening relations over historic disputes.
Even if the Korean chipmakers have not suffered any outstanding short-term loss following the restrictive measure from Japan, this has raised calls that the Korean tech firms should reduce its heavy reliance on overseas materials producers.
The analyst went on to say that the market conditions for the chip industry will further improve in 2020 amid the rise of the fifth-generation (5G) network under which memory consumption will surge.
In the era of 5G, the market for non-memory as well as memory semiconductors will further grow, he said. Against the backdrop, their demand is also expected to rise for years to come, which bodes well for the chipmakers' earnings.
