Samsung has cut the production DDR3, DDR4 and NAND memory. Why?
Samsung one of the top semiconductor producers, is planning to reduce manufacturing of DRAM and NAND because of shortages on the market. There could be an average of 20-25 percent decrease in production.
Demand and supply issues in the market for consumer goods continues to impact chip makers particularly Samsung. You may remember that Samsung was the South Korean giant reported a year-over-year drop to 95 percent for its operating profits in its first quarter in 2023. In connection with a decrease in demand for memory chips Samsung will reduce its production.
Samsung will concentrate on DDR5
In the wake of recently released figures, Samsung stated that it has enough memory chip to satisfy medium – and long-term demands and plans to cut down on production of old products. As of now Samsung has yet to provide specific information on the specific chips affected and in what degree.
However, experts in the industry predict a reduction between 20 and 25 percent in memory types like NAND DDR3, as well as DDR4. We can therefore say that the major manufacturer is likely to shift its focus towards more advanced DDR5 chips than the low-cost DDR3 or DDR4 memory.
The cost of contract for 8GB DDR4 RAM module reportedly fell by another 19.9 percent in January following an 18.1 percent decrease in January. Following that, even though they were stable throughout February and March price drops continue despite Samsung’s announcement about production cuts.
Research firm TrendForce anticipates a 15 to 20 percent price cut during the first quarter of 2023 while vendors struggle with the excessive inventories.
Even though the challenges on the market have a negative impact on producers, a few analysts remain hopeful and predict a rebound in 2024. In reality we can state that DRAM as well as NAND market is expanding every day. There could be an acceleration in manufacturing as new memory chips such as DDR5 become more commonplace.
