In this analysis, we compare Samsung’s memory business with Micron’s (NASDAQ: MU), which is one of the largest U.S. based memory companies. Samsung’s memory business is almost twice as large as Micron’s. We project Samsung’s memory revenues to stand at $41 billion in 2019, versus about $23 billion for Micron. DRAM accounts for a bulk of both companies memory revenues (est. $24 billion for Samsung in 2019 and $15 billion for Micron). Samsung’s operating margins are slightly higher compared to Micron’s, on average, they have been more volatile, likely due to the company’s slightly higher exposure to the more profitable, but volatile, DRAM space.
Note: Samsung’s FY ends December and Micron’s FY ends August.
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Samsung’s Memory Revenues are roughly double Micron’s
- Samsung’s memory revenues are projected to stand at $41 billion for 2019, down from about $61 billion in 2018
- Micron’s memory revenues stood at $23.4 billion in FY’19, down from about $30 billion in FY’18.
Both Samsung and Micron derive roughly 60% to 70% of their total revenues from DRAM
- Samsung’s DRAM revenues are expected to decline from $43 billion in 2018 to about $24 billion in 2019, due to the sharp decline in DRAM prices.
- Micron’s DRAM revenues fell from $21 billion in FY’18 to $15 billion in FY’19.
Both Samsung and Micron derive roughly 30% to 40% of their total revenues from NAND
- Samsung’s NAND revenues are estimated to decline from $17.6 billion in 2018 to $16.5 billion in 2019.
- Micron’s NAND revenues declined from $9.2 billion in FY’18 to $8.2 billion in FY’19, driven by lower NAND prices.
Samsung’s Operating Margins are higher, on average compared to Micron’s
- Samsung’s operating margins are higher compared to Micron’s as the company focuses on more differentiated products, while it also derives a slightly higher mix of its revenues from DRAM, which saw strong pricing over the last 2 years.
- However, Samsung’s margins also saw a larger decline over 2019, due to this exposure to DRAM.
Samsung’s Semiconductor CapEx is more than double Micron’s
- Over the last 2 years, Samsung’s Semiconductor CapEx (which also includes its spending on non-memory chips) has been more than double Micron’s.
- Over 2018 Samsung spent about $23 billion on memory capex. In comparison, Micron spent about $10 billion in FY’19.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.