5G and IoT gradually recover, memory industry is expected to be strong in the second quarter

Memory module manufacturer Team Group Technology announced its first quarter financial report, with a net profit of NT$41.51 million after tax (same unit below), a significant increase from the previous quarter and the same period last year, and earnings per share after tax of NT$0.62.

Team Group's revenue for the first quarter was NT$1.692 billion, down 8.76% from the previous quarter, but up 3.78% from the same period last year; gross profit margin increased by 0.79 percentage points to 6.78%. It is worth noting that the profit for the quarter increased by 1.1 times from the previous quarter and grew by 21.29% from the same period last year.

Team Group pointed out that the good operating performance is mainly due to the overall operation of its three major business groups, namely brand, e-sports and industrial control. Among them, the shipment of SSD and DRAM products in the first quarter increased by 15-40% compared with the same period last year, and the shipment of industrial control/SI business increased by more than double. In addition, the price per GB of SSD products has entered the sweet spot of the consumer market, accelerating the replacement of HDD as the main storage media for PCs and NBs. The company is optimistic about its huge upgrade opportunities.

Looking ahead to the second quarter, Team Group believes that the memory industry still has considerable room for development. It is optimistic that trends such as 5G, AI, IoT and big data will gradually ferment, and DRAM and NAND Flash applications will continue to rise. At the same time, Team Group is actively deploying a full range of SSD product lines; memory is mainly based on high-end RGB Gaming, and continues to capture the live broadcast and e-sports groups in Europe, America and Southeast Asia. In addition to continuously optimizing the product portfolio, it also continues to increase the brand's market share.

Regarding the memory price trend, Team Group President Chen Qingwen recently said that the DRAM market is currently oversupplied and the supply chain continues to destock. It is estimated that the prices of DRAM and NAND Flash will stabilize in the third quarter. He also revealed that the market is expected to bottom out and rebound in the second quarter as the demand for servers increases. At the same time, the decline in SSD prices has encouraged consumers to purchase more devices, and it is expected that market demand will continue to heat up.

In terms of the company's product revenue share in the first quarter, branded DRAM accounted for 34%, Flash products accounted for 17%, customized chemical control/SI accounted for 30%, and strategic products such as e-sports and mobile peripherals accounted for 18%.