Samsung shares hurt by negative Morgan Stanley forecast

Despite a stunning year and great profits in 2017, Samsung have seen their share value fall more than 4% this quarter after recommendation cuts by Morgan Stanley.

The investment firm cited concerns that the memory chip boom that has driven Samsung’s profits will hit a crest and drop in 2018.

What has influenced the memory chip revenues is what is known as the Super Cycle. This refers to the tight cost of supply and a high level of demand creating an incredible revenue spurt.

Samsung sees this cycle as continuing into 2018 as servers and Smartphones require more processing power but Morgan Stanley disagrees.

The Morgan Stanley Report

Morgan Stanley base their findings on a research report which cut the then current Samsung stock value by 3.4%, leading to a 4.2% drop in the actual share value.

The research report stated that the NAND prices have dropped in the fourth quarter and prospects for DRAM supply and demand look very much reduced in 2018 compared to 2017.

Other analysts and insiders have not agreed with Morgan Stanley’s findings however. HMC Investments said that the reports and resulting share crash was over sensitive.

The drop in NAND prices was a known variable for Samsung and it plays into the Super Cycle system, as the drop in NAND prices will drive further demand. The report also hurt Samsung rival SK Hynix who saw their share value drop 3.6%.

Coming Off A Great Year

Despite this share drop, the rest of 2017 was a winner for the tech giant, and had it benefits, much like the no deposit casino bonus Canada sites often feature.

The company announced that they expect their primary growth next year to stem from their component business including increased revenue driven by their flexible OLED panels.

Operating profit has almost tripled in value compared to last year’s growth. Revenue for Samsung has grown by an incredible 29.8% this year.

This could be partly due to the disaster that was the Note 7 last year. The device caused the company endless headaches and setbacks after it came to light the unit had a faulty battery that could spontaneously catch fire.

The Note 8 has seen an incredible return to form for the company and saw over 4 million devices sold around the world. It was a great segue for the company as the sales from their flagship S8 started slowing down early in the year.

Plans for Future Growth Of The Manufacturer

Samsung have also planned their future growth and announced they are working on 10 Nano DRAM chips, set to roll out in 2019. Currently they are manufacturing 18 Nano chips and will need a specially designed production facility to manage the smaller, more intricate chip designs.

The company will be starting construction soon on a special EUV facility as part of their Hwaseong complex in South Korea.

The new extension will be linked to 7 of the current semi conductor production lines expanding the complex to DRAM, NAND and foundry production lines.

With this production facility in place, Samsung will surely secure their spot for the next few years. They are currently in a very enviable position that simply cannot be reached by their closest rivals.

 

If their facilities can keep up with demand, they will be ready to face all challenges.

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