Thursday, September 20th 2018
Samsung To Reduce DRAM Output Growth in Favor of Maintaining Prices, Says Bloomberg
In a bid to head off investor worries of a potential downturn, Samsung is looking to tighten their belts in regards to the manufacturing of DRAM. In particular, this move is preempted by the expectation of DRAM bit growth to be less than 20% year-over-year, with bit growth being the key measurement for gauging market demand based on the amount of memory produced. Considering the semiconductor industry is known for its up and down cycles, Samsung's preemptive move could stabilize or even drive up the cost of memory coming out of not just them but Micron and SK Hynix as well. This would help keep their profits rolling in, just in case a downturn in demand does take place, but it also means PC enthusiasts will have to deal with memory prices remaining roughly the same or possibly climb higher going forward.
Anthea Lai, an analyst for Bloomberg Intelligence, in Hong Kong made note that "If Samsung does cut its DRAM bit growth, it shows the company is happy with the current oligopoly market structure." Elaborating further, he said that "It prefers keeping supply tight and prices high, rather than taking market share and risking lower prices, therefore chances for DRAM prices to stay strong is higher."
Morgan Stanley analysts have also predicted a weakening outlook for the server DRAM market which, paired with stalling smartphone sales, shows why investors may be spooked. This is especially true when one considers the market has enjoyed a two-year surge with record profits. What may not be abundantly clear, however, is this reduction in manufacturing also means a possible reduction in R&D investment by Samsung and its rivals. All we can do for now is wait and see how things develop.
Source:
Bloomberg
Anthea Lai, an analyst for Bloomberg Intelligence, in Hong Kong made note that "If Samsung does cut its DRAM bit growth, it shows the company is happy with the current oligopoly market structure." Elaborating further, he said that "It prefers keeping supply tight and prices high, rather than taking market share and risking lower prices, therefore chances for DRAM prices to stay strong is higher."
62 Comments on Samsung To Reduce DRAM Output Growth in Favor of Maintaining Prices, Says Bloomberg
Already there are cheaper SSDs out there with the same performance as Samy's and also RAM too. So good luck with them trying to compete on the price level with the Chinese and Taiwanese companies.
Another example if AMD processors or graphics cards were faster than Intel / NVIDIA due to the situation and how much they can produce at TSMC etc they could never supply enough. In this case Micro / Hynix can reap the benefit of higher prices along with Samsung by doing absolutely nothing. Overall supply diminishes and everyone laughs on there way to the bank.
Would be interesting once China enters the market. They don't seem to mind flooding the market with cheap stuff just to market share. Maybe by DDR5 things will improve.
www.eenewseurope.com/news/china-set-make-fifth-worlds-chips-2020-0Dont give them any ideas
I was hoping to stock cheap DDR4 near the festive season, but I guess that won't happen, probably ever!
About 50% of my new build....:),
Liquid Cool
You can't prosecute a company for setting their own price.
What Samsung does is 100% legal and actually fairly normal. Just like with Nvidia and RTX, they've decided to sell less items for a higher price. I don't understand why people here are reacting so negatively.Because semiconductor fabs and staff are expensive and there might be a better way of using them.
As for Samsung: I don't know the reason why they limit their DRAM output (other than just a possible profit optimization), but it's no secret that they've been planning to expand in PC segment for a while.
At this point they're mostly making RAM and LCD panels (and a tiny amount of notebooks), but we should expect more complex products in next few years (an alternative to Apple's lineup).
Also, it's almost official that they're getting back into large CMOS sensor manufacturing, which they left around early 2015.
as opposite i see nv who want to sell all previous gen stock without lowering prices...
at the end is how free market&capitalism run..... moar $ for them less for us...