Samsung will cut NAND flash memory production in China by about 15%

The memory market is subject to cyclical price fluctuations, which determine the policies of manufacturers. The largest of them remains South Korean Samsung Electronics, and its largest base for the production of NAND memory chips is an enterprise in Xi’an, China. Due to unfavorable market conditions, this year it will be forced to reduce production volumes of flash memory by about 15%.

Image Source: Samsung Electronics

This was reported by South Korean media familiar with the company’s plans. In the NAND market, as they specify, another overproduction crisis is brewing this year, so prices for the corresponding chips will fall. In order not to increase losses, Samsung prefers to reduce NAND production volumes. If last year the company produced about 200,000 silicon wafers with NAND chips per month at a plant in Xi’an, this year production volumes may be reduced to 170,000 pieces per month. Moreover, Samsung enterprises in Hwaseong, Korea will also reduce NAND production volumes.

Previously, under similar conditions, Samsung had to reduce memory production volumes in 2023, almost twofold. After the situation with prices for NAND chips normalized, the company increased its production volumes to 450,000 silicon wafers per month, taking into account all its existing sites. In the fourth quarter of last year, there was a tendency for prices for server-class SSDs to rise in the wake of the AI ​​boom by up to 5%, but in the current quarter they should decrease proportionally, according to TrendForce analysts.

It is interesting that SK hynix is ​​preparing to increase NAND production volumes in such conditions. If we consider that Samsung will choose to reduce the volume of memory supplies, then a smaller competitor will have the opportunity to strengthen its market position, albeit at the expense of profitability. High revenues in HBM supply allow SK hynix to take risks in the NAND segment.