Samsung Electronics and SK Hynix are expected to see their joint semiconductor sales top 100 trillion won for the first time this year. Analysts point to a continued “super cycle” of memory chips characterized by high global demand and low supply.
Our Bae Joo-yon has more.

Report: Samsung Electronics posted a record high 51-point-one trillion won in semiconductor sales last year.

SK Hynix saw its performance peak in 2015 when sales posted nearly 18-point-eight trillion won.

Thanks to a super cycle in memory chips, the two companies have been breaking quarterly records this year.

Samsung posted semiconductor sales of some 15-point-seven trillion won in the first quarter and 17-and-a-half trillion won in the second quarter. SK Hynix saw sales stand at nearly six-point-three trillion won during the January to March period and roughly six-point-seven trillion won in the second quarter.

Initially, industry experts had estimated that memory chip prices would drop from the second half of the year due to a surge in the two companies’ shipments.

However, a strong sales projection for Apple’s recently released iPhone X is expected to extend the super cycle of the chips.

On top of that, demand for server and cloud memories continues to be strong.

Analyst reports this month predict that Samsung Electronics will post between 72 and 78 trillion won in semiconductor sales this year while SK Hynix will post sales of between 28 and 29 trillion won.

If reached, the two companies’ chips sales could surpass 100 trillion won this year.

To put the figure in context, 100 trillion won is equivalent to six-point-one percent of South Korea’s 2016 gross domestic product. It is also about 23 percent of next year’s proposed government budget.

The two companies are expected to post new highs in terms of operating profits this year as well.

Analysts forecast that Samsung’s semiconductor sector will reap between 32 and 36 trillion won in operating profit while SK Hynix will post a profit of between 13 and 14 trillion won.
Bae Joo-yon, KBS World Radio News.