January-February 2022 Memory Company Earnings

This is a review of the financial results from Micron’s peer companies in DRAM and NAND manufacturing, released in January and February of 2022. In this review, I’m only looking for information on the markets for memory products; pricing, supply-demand balance, capacity investment, etc. This information is useful to Micron investors because the memory pricing cycle, with its three-to-four-year period, is the most important factor to consider when investing in Micron.

January 26, 2022

These were Nanya’s full year 2021 results. The company seems to have minimized pricing erosion in their sales during the six-month period of softness in DRAM prices. In the third quarter of 2021 their ASPs were up “twenties” percent. In the fourth quarter they were down low-single digits %. In the third and fourth quarters of 2021 Nanya’s bit shipments declined. They may be holding some inventory anticipating better pricing. The company is also losing market share to the big three. Their bit shipments were flat in 2021 and are forecasted to be flat in 2022. This is in an overall DRAM market that grew low-to-mid 20% in 2021 and is forecasted to grow high-teens % in 2022. Though Nanya is small, it is helpful that they are not growing as fast as the market as it reduces supply some. The company forecasted healthy DRAM growth across all segments, with true demand gradually emerging as 2022 goes on and component shortages clear. Nanya’s lack of DRAM bit growth in 2022 will help keep the market in balance and maybe undersupplied.

January 27, 2022

Samsung saw negative DRAM bit growth in the fourth quarter of 2021 and ASPs declined in the mid-single digits. ASPs had increased high-single digits percent in the third quarter of 2021. Samsung lost DRAM market share in the second half of 2021 and expects to match the market in the first quarter of 2022, with a small decline in bit shipments. In NAND, they saw both bit growth and ASPs decline in the low-single-digits %. NAND ASPs in the third quarter increased 10%. Samsung said they would slightly outgrow the NAND market in the first quarter of 2022. During the fourth quarter the company replenished inventory in DRAM rather than sell into a weak market. This seems to be paying off as ASPs are rising today. The company said only in 2022 they see strong DRAM demand, low inventory, and a clearing of supply chain constraints that is muting the true memory demand. While management didn’t say much directly about DRAM in 2022, what they said indirectly points to a market where demand exceeds supply.

SK Hynix
January 28, 2022

Hynix is Micron’s sister company. Both make ~70% of revenue from DRAM and ~25% from NAND. The two companies, along with Samsung, form an oligopoly that produces nearly 97% of the world’s DRAM. Hynix’s QoQ bit growth in DRAM was up mid-to-high single digits percent (was low single digits percent last quarter) and NAND bits were up low teens % (was up low-20% last quarter.) ASPs for DRAM declined mid-single digits percent were up high-single-digits percent Q/Q in the fourth quarter (was up high-single-digit percent in Q3) and NAND ASPs declined around 10% Q/Q (were up mid-single-digits percent in Q3). The company cited global supply chain issues for price weakness in both memory types during Q4. Looking forward to the full fiscal year 2022, the company forecasts DRAM bit demand to grow 18% Y/Y and NAND bit demand growth around 30% Y/Y. Hynix plans to match the market bit growth in DRAM. They said again they will prioritize profitability over market share in DRAM and will hold inventory rather than sell into market weakness. Their position continues to be the opposite in NAND. Management said again they plan to outgrow the overall NAND market in 2022. Hynix said they believe supply chain issues will ease in 2022, leading to higher memory demand as component constraints dissipate.

Western Digital
January 27, 2022

WD doesn’t have a DRAM business, and they sell hard drives, so I read their releases for insight into the NAND market. NAND bit shipments increased 13% sequentially (was up 8% last quarter) with ASPs down 3% (was flat last quarter). Their blended NAND ASPs declined 6% in the quarter (they were down 3% last quarter.) In the analyst call they said the NAND market is stabilizing and that they expect better pricing in the second half of 2022. They are seeing component shortages, specifically controllers, causing them to miss out on available NAND demand. Their NAND margins have expanded for the past year and were about flat in this quarter compared to the previous one. I still suspect the NAND market will go into oversupply this year because both Hynix and Samsung have said they plan to outgrow the market, and combined they are half of the market. I want to believe what WD is forecasting; that NAND prices are stabilizing and will improve later this year, but two of the biggest players saying they will try and gain market share this year is a strong indicator the market will be oversupplied later in 2022 and prices will decline faster than producer costs. The counterargument to my concern about oversupply is that the NAND market is elastic enough and demand is diverse enough that a fast drop in prices is met with increased demand, tempering the oversupply before ASPs decline too far.


Low inventory is one of the consistent comments from the big three DRAM makers. Supply chain constraints clearing as 2022 progresses was heard from all five memory companies. All have said that shortages of other components have been masking true demand for memory products and that they anticipate relief will come gradually in the current year. The four DRAM companies saw a low-single-digits decline in ASPs in the last quarter of 2021 and are forecasting a similarly small decline in DRAM pricing in the first quarter of 2022. While none came out and said it, because they don’t forecast pricing, they all strongly signaled that the first quarter will be the bottom for DRAM pricing and ASPs will get better as 2022 passes. Similar commentary was made for the NAND market, about 2022 being an up year as well. I am not optimistic about that, because Samsung and Hynix, with combined market share around 50%, have both said they plan to outgrow overall NAND bit supply in 2022. In DRAM, which is much more important to Micron than NAND, I am optimistic. Nanya said their bit supply growth in 2022 will be flat. The big three makers have all said they plan to match the market in bit supply. Samsung and Hynix both said they will prioritize profitability in DRAM, signaling they will be cautious when making new investment in capacity. Signs are pointing to 2022 being a good year for the DRAM market.

-S. Hughes (long MU)