The memory chip industry had thought pricing and profits would increase in 2020, as Samsung predicted in January; however, like most industries the global pandemic has caused a short circuit to those predictions.

At the start of the year, SemiMedia noted:

“The semiconductor industry has now shown signs of recovery. At the same time, due to the introduction of 5G and foldable screen phones, the market's demand for smartphones has also ushered in, so the demand for memory chips will also increase. Some analysts expect Samsung's overall operating profit this year to increase by up to 40%.”

However, this week the publication had a more pessimistic view:

“In the past month, the price of memory chips has fallen by 4%, which is completely contrary to expectations at the beginning of the year. In addition, analysts predict that the memory chip market prices will not improve in July, and may continue to fall.”

While the news, in many cases, is not encouraging, the ECIA recently reported “the industry is seeing a bounce back in the sentiment index of component manufacturers reflecting an improvement in sales”.

While overall product sales may still be stagnant, certain industries are increasing their purchases of memory chips and other electronic components. The push of 5G was seen, at the start of the year, as an area that would boost sales. But the restrictions of working during the pandemic may have slowed that industry’s development. Medical, aerospace and robotics has seen an increase in component needs including memory chips.

Manufacturing in countries that have lowered the transmission of Covid-19 has restarted, but the United States, the largest purchaser of chips, is still being impacted by the virus. The companies manufacturing ventilators and retooling their production lines to make PPE and other items used to fight the virus may help the chip space. But if consumers are not buying other products that use memory chips due to lower income, the bounce back may take longer than predicted at the start of the year.