Samsung may scale back memory chip output by 25%

Samsung is strategically thinking about decreasing chip production by 25%, according to the report. The company is doing this to manage the cost of inventory. This is all happening after the coming of the report, which reveals the earning and specifies that the operating cost has dropped by 95%.

According to the Samsung security analyst, Hwang Min Seong forecast that the company can decrease more productions if the ongoing reduction fails to lower the tech giant’s inventory level sufficiently.

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According to further reports, Samsung is cutting down production on low-cost DRAM modules, such as DDR3 and DDR4, because of low demand and will invest in the latest generation chips like DDR5. In addition to these, the market share of DDR3 RAM is constant at 3 percent. The figure is expected to drop to 2 percent this year, and in the further year, it will drop to 1 percent. Apart from these, DDR4 also recorded rapid negative growth, and the market share dropped from 36 percent to 23 percent.

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Meanwhile, the DDR5 is now getting more popular; it is highly expected to record exponential growth. It will lead the RAM market. The latest DRAM is expected to be up to 52 percent of the market in 2027, while in comparison to last year, it has received 3 percent growth.

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The average contract price of 8-Gigabit DDR4 DRAM came to $1.45 on the spot market Friday, down nearly 19.9 percent from a month prior. After falling sharply by 18.1 percent in January this year, DRAM prices maintained a similar level in February and March and started falling at a steeper rate again.

Taiwan’s market research firm TrendForce said that “prices will continue to plunge by 15-20 percent on-quarter in the second quarter as suppliers still struggle with high levels of inventory”.