Samsung apparently quickly changed its strategy in the flash memory market again after attempting to expand its own market share through a low-price policy, even though demand has plummeted. Samsung is now reducing production.
As the Taiwanese industry service DigiTimes reports, citing a number of sources from the industry, Samsung now wants to help raise the prices for flash memory again by reducing production volumes. The company is therefore initially reducing capacities slightly.
According to the report, Samsung has recently lowered the utilization rate of its flash production lines to help stabilize prices in the NAND flash market. The Korean group’s plants are currently only working at around 90 percent of the usual capacity.
The background is similar reductions in capacity at all other major flash chip manufacturers. Kioxia, Micron, and SK Hynix had all started reducing their production volumes as early as the fourth quarter of 2022 because there seemed to be no other way to stop the price decline. It is currently assumed that the downward trend in prices and demand will bottom out in the first quarter of 2023.
Manufacturers are currently suffering from a sharp drop in demand from the PC and smartphone market. Demand for other electronic products has also plummeted as a result of the war in Ukraine. The situation is dramatic for NAND manufacturers because they currently have higher production costs than they can recoup when selling their products.
Samsung is ultimately forced to take countermeasures because the company, like the other NAND providers, would otherwise make massive losses in the long term. The situation is expected to improve from the second quarter of 2023, although this also depends on how the situation in Ukraine develops.
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