>> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules. Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions. BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 8 to 12. Analyst Certification on page 7. Price Objective Basis/Risk on page 7. 12654650 Global Memory Tech Weekly theme: strong Jan exports, Feb spot rally, HBM EUV, Samsung re-rating Industry Overview Korea’s semis exports up 56% YoY in Jan Korea’s semis export growth rate accelerated from +13%/+22% YoY in Nov/Dec to +56% in Jan (absolute amount US$9.4bn). The key contributors likely were ASP hike (10%+ MoM or 30%+ YoY) and mix improvement – shipping more expensive HBM3 and DDR5 vs commodity DDR4. We also observe more value-added NAND product exports instead of just fabricated wafers (or raw chips). This is far higher than 2020-21 growth rates (10-30%) following the 2019 downturn. Since Feb exports will be similar to Jan’s level or slightly lower (less working days) at US$9bn+/- (vs a US$6.0bn year ago), we expect the 50%+ growth rate to be sustainable. Once we input Jan exports data into our memory indicator, the export index shows 121 or upcycle, exceeding the mid-cycle 100. The trough was established in Jan-Apr 2023 at 72-74 (20-year low; see Exhibit 13). DRAM and NAND spot strength likely to continue Memory spot price firmly rose this week led by 512Gb NAND (+7% WoW) and 16Gb DDR5 (+2%). This is consistent with the memory upcycle – OEMs’ channel inventory restocking ahead of Lunar New Year holidays or concerns about chip price hike. As memory chipmakers still maintain low utilization levels while demand gradually recovers (per-box content increase also seen), we expect 5%+ spot price rally even in 2H of Feb. More EUV tools for Hynix’s HBM3e besides Samsung Our channel check indicates SK Hynix is actively increasing its EUV capacity for HBM3e (1b node vs just 1z for HBM3). We also learned of mgmt’s commitment to “crossover”, which means HBM3e will count for 50%+ of total HBM sales through 2H24, even if initial shipment (HBM3e) starts only in late-1Q. We believe Hynix already operates 4-5 units of EUV (for HBM3e and DDR5) in M16 fab, but it could be 9-10 by end-2024. True, this is still a smaller scale vs Samsung Electronics’ (20+ units of EUV for DRAM) but Hynix’s EUV ramp-up seems much stronger than the industry average. NVIDIA’s orders (for HBM3+...
