Increased shipments + price hikes, Nomura predicts better performance in the storage sector in the second half of the year | AI Dehydration

Author: Shen Siqi

Source: Hard AI

The market is talking about the shortage of HBM, which is driving further price increases for traditional DRAM and NAND.

So how did the storage market, represented by South Korea, perform in the second quarter, and how much growth is expected in the third quarter?

Nomura provided a brief overview in yesterday's report.

2nd Quarter Shipments Up 1% MoM, Significant MoM Growth in June

In the second quarter, South Korean semiconductor companies' memory revenue is expected to increase by 137% year-on-year and 29% month-on-month, partly due to the appreciation of the US dollar against the Korean won (the USD/KRW exchange rate increased by 9% year-on-year and 4% month-on-month in 2Q24).

Memory shipments in the second quarter are expected to increase by about 10% year-on-year and 1% month-on-month, with DRAM and NAND prices both rising by about 20%.

Specifically, memory exports in June are expected to increase by 29% year-on-year and 85% month-on-month to 8.8 billion USD, driving second quarter memory exports to reach 21.5 billion USD (up 14% month-on-month and 94% year-on-year).

Continued MoM Growth in 3rd Quarter, 10% Price Increase for DRAM and NAND

For the 3rd quarter, Nomura further predicts that South Korea's memory revenue will increase by 31% year-on-year, with continued month-on-month growth driven mainly by HBM capacity expansion and rising commodity prices.

Importantly, Nomura expects significant improvement in the profitability of South Korean semiconductor companies in the second half of 2024. Due to HBM capacity expansion and strong demand, DRAM and NAND prices are expected to rise by 10%.

In yesterday's AI Dehydration, Hard AI pointed out that SK Hynix announced an investment of 103 trillion Korean won (approximately 74.7 billion USD) to further strengthen its AI storage chip business by 2028.

About 80% (82 trillion Korean won) of the investment will be used to develop high-bandwidth memory (HBM) chips to support the development of AI chips.

Nomura provided capital expenditure details for South Korean semiconductor companies under different products and processes in the report. Specifically:

At different technology nodes, the capital expenditure required for each additional 10,000 units of capacity for DRAM, NAND, and wafer foundry is as follows:

• Wafer Foundry: 20 trillion Korean won for 7nm, 32 trillion Korean won for 5nm, 27 trillion Korean won for 3nm
• 3D NAND: 10 trillion Korean won for 128L, 14 trillion Korean won for 176L
• DRAM: 9 trillion Korean won for 1ynm, 10 trillion Korean won for 1znm, 12 trillion Korean won for 1anm

Note:

• The unit for 3D NAND is "layers" (L)
• The unit for DRAM is "nanometers" (nm)
• y, z, A represent the second, third, and fourth generation 10nm process nodes.

During the previous performance meeting, the company also emphasized the launch of a 32Gb DDR5 product based on 10-nanometer technology this year. This is the fifth generation 10-nanometer (1bnm) technology to strengthen its leadership position in the high-capacity server DRAM market