Samsung Electronics, SK Hynix Expected to Benefit from Data Center Expansion

Data center of Google

Samsung Electronics and SK Hynix are expected to benefit in the server chip market with Amazon, Facebook, Microsoft and Google having increased their data center investment by approximately 40 percent.JPMorgan Chase & Co. said in its recent report that the four American companies’ Q1 facility investment increased 6 percent from the previous quarter and 40 percent from a year ago.

According to the report, Amazon is expected to increase its investment by 22 percent and Microsoft’s investment is estimated to increase by 20 percent this year whereas Google and Facebook are likely to reduce their investments by 14 percent and 1 percent, respectively. The combined investment of the four companies is estimated to increase 17 percent this year and a similar increase is anticipated for next year.

JPMorgan Chase & Co. explained that DRAM manufacturers such as SK Hynix and Nanya can benefit from the stable server investment. Earlier, during their Q1 earnings announcements, both Samsung Electronics and SK Hynix repeatedly stressed an increase in demand based on data center expansion.