Mixed reviews for stocks of Samsung, Hynix
By Kim Yoo-chul
Analysts are predicting a mixed outlook for top semiconductor makers Samsung Electronics and Hynix.
The unit price of the industry’s benchmark 1 GB DDR3 DRAM was trading at $2.09 as of the end of August from $2.5 in May, while that of 16GB NAND flash dropped to $3.94 from $4.42 as had been traded early this year, said DRAMeXchange, a market research firm.
``Although the sector for flash-type memories looks strong, DRAM prices are sliding a bit faster than previously expected,’’ said Ahn Sung-ho, an analyst at Hanwha Securities, Thursday.
Ahn said the consolidated-based operating profit for Samsung in the third quarter will lower to 4.82 trillion won from the previous quarter’s 5 trillion won.
Dongbu Securities has also been in line with Hanwha by cutting its target price for Samsung to 1 million won per share from 1.06 million won.
Although the chief of Samsung Electronics’ semiconductor division Kwon Oh-hyun remains positive about third quarter earnings despite such worries, a Samsung spokesman said the world’s top DRAM maker is seeing a slower demand for personal computers in its key markets.
Hynix is also expected to report reduced quarterly operating profit during the July-September period, after being hit by the months-long correction.
Hynix spokesman Sohn Kyung-bae declined to comment.
Analysts expect the operating profit based on an international accounting evaluation for Hynix in the third quarter to be cut to below1 trillion won.
Japanese brokerage firm Nomura Securities maintained its ``buy’’ rating for Hynix and presented 33,000 won as its target.
Nomura predicts investor sentiment worsening throughout this year. But the brokerage sees a recovery of Hynix shares from the first quarter of next year.
It said the current correction is giving better chances to investors to take up Hynix shares as the Icheon, Gyeonggi Province-based chip maker is increasing output by gaining efficiency from more advanced production lines.
Hynix sees a market gap of some 10 percentage points with the industry leader Samsung.
However, its DRAM manufacturing technology is keeping abreast with Samsung.
It is also boosting the output for flash-type chips, inspired by the stable demand for NAND-embedded applications, Sohn at Hynix said.
Leading DRAM makers are forecast to continue with fairly good margins as chips with advanced technologies will offset any massive price declines.
``We expect Samsung to report operating profit margins of between 40- and 50-percent from its DRAM business, while at current pricing levels, second-tier players are still showing 20- to 25-percent operating profit margins,’’ said Nomura, adding Hynix will report a ``fair’’ third quarter.