The inventory sales rate of Korean chip manufacturers in January rose to a new high since March 1997

Source: Smart Core

    On March 5, according to Yonhap, the data released by the National Bureau of Statistics of the Republic of Korea on March 5 showed that the inventory sales rate (inventory ÷ sales last month) of Korean chip manufacturers in January rose to 265.7%, the highest since March 1997 (288.7%).

    Specifically, in February 2023, the export value of South Korean semiconductors fell 42.5% to 5.96 billion US dollars, and the overall export value fell 7.5% to 50.1 billion US dollars, which is the fifth consecutive month of decline.

    South Korea‘s Minister of Foreign Affairs Chou Kyong-ho last week called for the rapid passage of a bill by the Congress to give more tax credits to chip manufacturers in the case of continued downturn in exports.

    The Korean Herald Daily reported last week that industry insiders revealed that the inventory of Samsung Electronics in the fourth quarter of 2022 increased by 26% year-on-year to an all-time high of 52.2 trillion won. At the same time, the inventory of SK Hynix also increased by 75% year-on-year to 15.6 trillion won.

    Fitch Ratings pointed out on March 2 that the drag of excess inventory on the US chip industry is greater than the export ban.

    Earlier, Christopher Danely, an analyst at Citi Research, also published a report at the end of February, pointing out that the semiconductor industry has so far absorbed only half of the excess inventory.

    According to the financial report released by Samsung Electronics on January 31, in the fourth quarter of 2022, the revenue of the device solution (DS) department (including memory chips) fell 24% year-on-year (13% month-on-month) to 20.07 trillion won, and the operating profit fell 97% year-on-year (95% month-on-month) to 270 billion won.

    SK Hynix said on February 1 that industry experts expected inventory to peak in the first half of this year because market participants planned to reduce investment and production, and the market situation is expected to gradually improve in the second half of this year.

    Marvell, an IC design company, said after the market on March 2 that the inventory adjustment and the consequent changes in product mix would hit the revenue and gross profit margin outlook of this quarter.