Counterpoint Research said the recent share-price pullback in memory chip makers does not signal a fundamental shift in the industry. According to MS Hwang, director at the research firm, Samsung Electronics fell 6.9% on Tuesday and SK Hynix declined 6.1%, even as Samsung is expected to post another record quarter on the back of strong demand. Hwang noted that some investors may believe much of Samsung’s upside, driven by expectations for stronger profitability, has already been priced in. He also pointed to recent strike actions and political debate around profit sharing as possible sources of concern over future shareholder returns. Even so, Counterpoint maintains that industry fundamentals remain solid. In its July memory chip price tracker, the firm raised its forecast for third-quarter DRAM prices, now expecting an increase of 10% to 20%, above its earlier projection of 5% to 10%, as customers continue placing orders in advance.
Counterpoint says recent share declines do not signal a market reversal
On July 7, BlockBeats reported that Counterpoint Research director MS Hwang said the recent correction in memory chip makers’ share prices should not be interpreted as a fundamental turning point for the memory market. Samsung Electronics fell 6.9% on Tuesday, while SK Hynix dropped 6.1%, despite Samsung guiding for another record-setting quarter supported by strong demand.
According to Hwang, some investors may see Samsung’s earlier rally as having already priced in much of the upside tied to improving profitability expectations. He added that recent strike actions and political discussion surrounding profit sharing may also be contributing to investor concerns about future shareholder returns. Even so, he stressed that the underlying fundamentals of memory chip manufacturers remain solid.
Counterpoint lifts Q3 DRAM price outlook
In Counterpoint’s July memory chip price tracker, the firm said DRAM prices are now expected to rise 10% to 20% in the third quarter, above its earlier forecast range of 5% to 10%. The upward revision was attributed to customers continuing to place orders ahead of time. The updated forecast suggests that, despite short-term weakness in chip stocks, demand and pricing conditions are still providing support for the sector.
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