[Korean Market, Tuesday November 10 (month 11)] When a Rebound Could Begin | War Nearing Its End? | Stock Rider’s Theory | Morgan Stanley’s Shawn Kim Cuts Samsung and SK hynix Operating Profit Estimates by Over 30%
An independent exercise, not a statement by the video creator or verification of every claim in the video.
Check whether fewer orders reflect lower end demand
A hypothetical customer uses 100 memory units each quarter but takes delivery of 120 to prepare for shortages, adding 20 to inventory. If it still uses 100 next quarter and draws on the extra 20, it orders 80 new units. Orders fall from 120 to 80, or about 33%, while actual usage stays the same.
Check for yourself
- When shipments fall, are customer inventories and actual usage falling too?
- If contract prices decline, how would you check the supplier’s output, product mix and fixed costs?
Limits of application
The example uses one hypothetical customer and assumes orders and shipments occur in the same quarter. Forecasting actual prices or profits requires contract and cost data.
- What to look for
- Break down the analyst’s long-run chip margin forecast into assumptions about supply, data center operation and memory demand per server.
- Why it matters
- Separate customer orders from shipments and usage, and assess how an inventory adjustment could affect prices and margins.
Timeline
7 segmentsCiting Morgan Stanley research, the broadcast reports lower long-run profitability assumptions for Samsung Electronics and SK hynix. The assumptions involve supply growth, data center construction schedules and memory content per server. Analyst estimates and reported operating results differ in timing and purpose.