Samsung Electronics: Strong Guidance Suggests Memory Price Increase Is Above Our Expectations

Samsung Electronics guided for March quarter sales of KRW 71 trillion, up 11.4% year over year, and operating income of KRW 6.6 trillion or 9.3% operating margin, up from KRW 2.8 trillion or 4.1% operating margin in the December quarter. Although the preliminary operating income figure exceeded our forecast of KRW 5.3 trillion, which had assumed 16% sequential average selling price growth for DRAM and 20% sequential ASP growth for NAND, the preliminary numbers were not surprising, as Micron Technology had already announced in late March that DRAM and NAND ASPs for the February quarter were up in the high teens and over 30% sequentially, respectively. Samsung will release full results including segment breakdowns and hold a conference call on April 30. The focus of the results will be on whether the momentum of memory price increases will be maintainable in the second half of the year, which depends on current inventory levels and capacity utilization, as well as the improving product mix from increasing high-end memory such as HBD and DDR5.