Storage manufacturers are facing high inventory pressure

Recently, Yonhap reported that due to the shrinking market demand, by the end of 2022, the inventory of Samsung Electronics DS (semiconductor) department had climbed to 29.06 trillion won, up 76.6% year on year.
 

At the same time, the inventory turnover rate of Samsung Electronics dropped from 4.5 at the end of 2021 to 4.1 at the end of last year. Inventory turnover rate is an indicator of the company's sales inventory speed. The higher the turnover rate, the faster the inventory is converted into sales.
 

According to the financial report released by Samsung on January 31 this year, as of December 31, 2022, the revenue of the DS department of Samsung in the fourth quarter was 20.07 trillion won, of which the revenue of the storage business was 12.14 trillion won, down 20% month-on-month and 38% year-on-year.
 

In order to adjust inventory, Samsung disclosed in its financial report that in terms of semiconductor business, it is expected that the factory utilization rate will decline in the first quarter.
 

In addition to Samsung, memory manufacturers such as Micron and Western Digital also face high inventory pressure.
 

The industry is experiencing the most serious imbalance between supply and demand since 2013. Over-supply of storage chips and insufficient demand led to the company holding more inventory and losing pricing power. In the past few months, we have seen a sharp decline in demand. " The financial report of Western Digital showed that the number of inventory turnover days increased from 128 days in the previous quarter to 133 days, and the number of inventory turnover days increased for five consecutive quarters.