Samsung will reduce the output of memory chips next year
According to a report of foreign media on Sept. 20, Samsung plans to limit the output of memory chip next year, in order to keep the balance of supply and demand with a slowdown to memory chip.
This helps in maintaining or improving semiconductor prices, said the person. What's more, Samsung predicts that the bit growth of DRAM(dynamic random access memory) is less than 20% while NAND flash is about 30%. However, Samsung predicted the bit growth of DRAM and NAND are 20% and 40%, respectively.
Bit growth is the key barometer for the demand of chip memory market. A weaker prediction may lead to chip maker’s cutback of investment in equipment and order bill of materials, supply limit or higher price. Samsung is the biggest manufacture of NAND and DRAM, together with Hynix Semiconductor, leading vital raw material supply of smart phone, computer and other digital storage.
It indicates the firm’s satisfaction in monopoly, if Samsung really reduces DRAM bit growth. “It tends to keep a tension supply and high price, rather than seizing market share when taking risk of prices fall. Therefore, the probability of DRAM memory remaining strong is higher.”
Samsung declined to comment.
Semiconductor business is Samsung’s largest and the most profitable business, because it makes chips for its own equipment, and sales chips for smart phone manufacturers. Chip business earned 3.52 billion won in 2017, which doubled and drove setting a record of profit.
Samsung shares fell 7.3% this year after it went up to a peak in 2017.
Earlier, prospect of server DRAM memory chip is weakening and inventory will be increasing, warned by the analysts in Morgan Stanley including Shawn Kim.
According to IC Insights’ data, bit growth of DRAM memory chip is 20% in 2017, half of 40% in 2016. While server promoting demand of memory, the stagnation of global smart phone selling gave rise to worrying about the growth of semiconductor market.
In addition, Samsung produces OLED screen for Galaxy Smart phone and iPhone.