What's the story
From early November, we will be marketing for Tech's next year's forecast, especially for the semiconductor sector. We explained our expectation that the direction of memory semiconductors will turn into a downward trend from the middle of next year. Most investors were positive about the industry in the coming year, and the semiconductor sector was somewhat early to sell, but it tends to see the changes and the timing of the sellout by confirming other investors' positions. Meetings are held in three perspectives:
Background to supply growth and data points: As the boom continues, large-scale capacity additions are underway to prepare the necessary capacity in the future, and plans are changing aggressively over time. In the past, capacity additions were different in that they were prepared to reduce the lead time of supply, which is currently slowing due to weak visibility and difficult technology, if economies of scale were to achieve economies of scale and compete for market share. However, Samsung C & T's DRAM capacity is expected to increase to 120,000 units next year, including the Pyeongtaek plant. However, considering the loss due to process shift and CIS conversion, Net additions are expected and the effects of supply growth will begin in 2H. Investors are interested in when it will be possible to confirm this supply plan through the supply chain.
Inspecting Demand: Investors tend to absorb demand in the long term even if supply is increasing, but they tend to check for short-term demand due to lack of visibility. One of the recent unusual things is that Apple made a large-scale order cut for memory semiconductors in October due to sluggish sales of the iPhone 8, but the fact that the spot market did not respond to this, Reflecting the positive atmosphere of. However, since the sale of iPhone X, additional orders have not been seen to make up for the sluggishness of iPhone 8. In addition, as the loading rate per device, such as Client SSD, has started to decline at an increased price, it is expected that price decline should be initiated.
Valuation appeal and Re-rating:
Even if the semiconductor industry changes after 2H09, if the earnings forecasts for this year and next year are similar, semiconductor stocks are still undervalued and some investors are expecting a re-rating. However, we believe it is difficult to achieve a re-rating in the midst of structural supply growth and the entry of Chinese semiconductor makers. Last week, the Chinese YMTC reported that it delivered a customer sample of 32-stage (64Gb MLC) 3D NAND to its customers, more than expected at the end of this year and early next year. Given that there are no comments at the company, it is expected that the competitiveness in terms of characteristics and chip size will be lowered. However,