Samsung has a calculated strategy to turn around its memory chip business

Over the last ten years, Samsung has achieved historically high profitability thanks in part to DRAM and NAND flash memories. But declining prices and a glut of supply have completely reversed Samsung’s memory chip fortunes, as the company has been reporting sharp reductions in profits for several quarters running.

Now that the company is projecting the memory chip industry to earn a profit in 2024, things appear to be finally turning around for it. Samsung has put a strategic strategy in place to bring its memory chip division’s illustrious past back to life.

Samsung plans to reduce output to support the memory chip industry

Sales of DRAM and NAND flash are already rebounding for the corporation, surpassing internal projections for the previous year. This indicates that market demand has improved. Samsung is strategically reducing the manufacturing of DRAM and NAND flash memory to support this as well.

Samsung has been retaining a sizable amount of its memory product inventories. Samsung only increased prices slightly in comparison to the competition in an effort to minimize stock, which allowed the business to sell more chips and raise its utilization rate. Samsung’s DRAM usage rate is now predicted to rise from 70% in Q4 2023 to 81% in Q1 2024 and then to 89% in Q2 2024.

Samsung anticipates a reduction in overall shipments of DRAM and NAND flash in Q1 2024 owing to seasonality, even with prices continuing to grow. This is because the industry normally experiences low demand during this period. It’s anticipated that price increases combined with calculated production reductions will allow Samsung’s memory division to make money in the first quarter of this year.

Additionally, it is anticipated that Samsung will start producing its HBM3e 24GB memory chips in the first half of this year, and its 36GB chips in the second. Additionally, Samsung is working on next-generation HBM4 chips, which should go into production in large quantities in 2026.