According to Bloomberg News, Samsung Electronics plans to cut the growth rate of its memory chip production next year to keep supply tight as demand slows.
People who are unwilling to disclose their identity say the move will help maintain or push up semiconductor prices. They revealed that Samsung currently expects dynamic random access memory (DRAM) capacity growth to be less than 20%, and Nand flash growth is 30%. Samsung said earlier this year that DRAM is expected to grow at 20% this year, while Nand is at 40%.
Memory capacity growth is the touchstone for measuring market demand. The decline in forecasts may cause chip makers to cut investment in equipment and materials orders, while limiting supply and pushing prices. Samsung is the world's largest Nand and DRAM producer, and SK Hai Lux and Micron Technology together control the supply of key components for smartphones, computers and other digital data storage devices.
'If Samsung does cut its DRAM capacity growth, it shows that the company is satisfied with the structure of the current oligopolistic market,' said Anthea Lai, an analyst at Bloomberg Industry Research in Hong Kong, 'Samsung tends to maintain tight supply and high prices, Rather than taking the risk of market share and taking the price down, DRAM prices are more likely to remain strong.'
Samsung declined to comment.
Semiconductor is Samsung's largest and most profitable business, producing chips for its own devices and selling it to other smartphone manufacturers. The chip division generated 35.2 trillion won ($31.4 billion) in operating revenue in 2017, doubled year-on-year. Above, to promote the company's performance to a record level.
After the news came out, Micron Technology once rose 4.8% in New York. Western Digital, which produced flash memory with Toshiba, once rose 3.9%.