As costs of NAND flash and different memory semiconductors keep falling, the market is watching to see how the Japanese government’s imposition of export barriers on semiconductor materials impacts semiconductor manufacturing and price fluctuations.
Based on sources in the South Korean semiconductor trade, the expectation that it will be tough to purchase high-purity hydrogen fluoride and other semiconductor materials made in Japan is resulting in rumors about decreased manufacturing and higher costs of NAND flash. Source say that output can be slashed to regulate inventory amid an anticipated shortage of parts and that reduced supply will trigger an increase in costs. Boosted by these expectations, share prices at Samsung Electronics and SK Hynix continued to trade strongly, rising 1% and 4.4%, respectively, on Wednesday.
However, a reduction in memory semiconductor production had already been in the works, for causes unrelated to Japan’s export bans. Profitability in the reminiscence semiconductor trade has continued to decrease as prices dropped and inventory grew, already inflicting some manufacturers to reduce production in 2019. On Apr. 25, shortly after declaring its first-quarter earnings, SK Hynix stated that it would cut production by lowering the input of NAND flash wafers by 10% per year. Samsung Electronics further hinted at lower manufacturing in a conference call, during which it announced its first-quarter standing.
The view within the semiconductor industry is that Japan’s export controls won’t have a severe impact, at the least for now, on the memory semiconductor market.
On Wednesday, Lee Seung-woo, an analyst with the Eugene Investment Firm, drew attention to a rebound in some commodity costs for low-capacity wafers.