The stagnation and demand problems in the consumer market continue to affect chip manufacturers, especially Samsung. As you may recall, the South Korean giant reported a year-on-year decline of 95 percent in its operating profit for the first quarter of 2023. Associating this situation with the decrease in demand for memory chips, Samsung plans to reduce production.Samsung will focus on DDR5
Following the recently published financial results, Samsung stated that it has sufficient stock of memory chips to meet medium and long-term demand and plans to reduce production of obsolete products. At this point, the company did not share detailed information about which chips will be affected or to what extent.
On the other hand, industry analysts predict a cut of around 20 to 25 percent for memory like NAND, DDR3, and DDR4. Therefore, we can say that the giant manufacturer will turn its focus to more advanced DDR5 chips rather than low-cost DDR3 and DDR4 memory.
The average contract price of the 8GB DDR4 RAM module reportedly dropped another 19.9 percent last month, after an 18.1 percent drop in January. After that, although they remained stable in February and March, prices continue to fall despite Samsung’s announcement of production cuts.Market research firm TrendForce predicts a 15 to 20 percent price cut in the second quarter of 2023 as suppliers grapple with high inventory levels.
Although demand problems in the market are affecting producers, some analysts remain optimistic and suggest a return on the horizon in 2024. As a matter of fact, we can say that the DRAM and NAND market is growing day by day. We may see a rapid recovery in manufacturers as advanced memory chips like DDR5 become mainstream.
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