It was reported on the 13th that Jin-young Park, executive director of the Samsung Electronics Device Solution (DS) purchasing team, said, "Do not expect much from next year (semiconductor investment)" at the meeting of the semiconductor equipment division of the Samsung Partner Company Association last month. He also asked each company to “focus on improving the company structure and operation."
This statement indicates that Samsung Electronics' semiconductor facility investment will drop sharply next year. It was reported that the purchasing executives had told multiple partners to wait until the first half of this year. However, as the tone has changed to 'Do not expect' and the phrase 'improvement of the structure' has been uttered, not only the major equipment companies included in the Association, but also the second and third partner companies are busy preparing countermeasures.
Samsung Electronics is already slowing its memory investment. In the second half of the year, the company has delayed plans to expand its Pyeongtaek 1-line 2-story DRAM. It is estimated that the construction of the Xian NAND Flash 2 plant in China has been delayed by one to two months.
The industry expects that semiconductors, especially memory facilities, will shrink sharply next year. DRAM prices, which had until recently been on the upswing, have declined. NAND flash has increasingly been slowing down. Experts explain that it is time for the so-called investment adjustment. If the investment is delayed, the price may decrease at a small rate or rebound. However, equipment companies suffer difficulties due to the cut in investments.
SK Hynix has already announced that it will cut investment next year. Experts estimate that there will be a cut of about 30% or more compared to the investment (16 trillion won) this year.
The display field is experiencing more difficulties than the semiconductor field. This year is already an 'investment cliff' situation. Samsung Display has yet to launch its 6th-generation flexible organic light emitting diode (OLED) A4 plant, of which equipment has already been procured. It is an analysis of the industry that operating this plant makes the consideration of a next investment possible. LG Display is not much different.
Gary Dickerson, chief executive officer of Applied Materials in the United States, said in a recent earnings conference call in August that chipmakers could curb facility investment and reduce manufacturing equipment purchases. Japan's Tokyo Electron, Hitachi High Technology and Advan Test also lowered their earnings forecasts for the next quarter.
There is also an analysis that the reversal situation will take place in the next year after going through the adjustment period. The Semiconductor Equipment and Materials International (SEMI) predicted that sales of the semiconductor equipment market would decline 4% from the forecast this year, but are expected to increase to 20.7% the following year.