In recent days, LG and Samsung have issued preliminary Q4 results, both coming in below expectations. Memory chip prices have risen, however, owing to a better balance between supply and demand – production has come down while demand for mobiles and PCs has recovered. Both Samsung and SK Hynix, the two largest manufacturers of DRAM chips (used in PCs and smartphones, among other things), indicated on their Q3 conference calls that demand for memory chips had finally reached its trough.

After indications of a recovery in the Chinese mobile market at the end of Q3, Digitimes reported in October that smartphone manufacturers were beginning to replenish their semiconductor stockpiles. We further expect that November’s Singles Day campaigns in China will have had a positive effect on China’s mobile sales, which had declined sequentially in Q3.

Transformation continues