Samsung / SK Hynix postpones expansion of production: the broken dream of slashing price in memory

When the price of memory has been rising for more than two years, the industry widely predicts it will return to normal in the fourth quarter of this year. Unfortunately, before they could get excited, the bad news is coming.

By quoting industry sources, Taiwan media says that Samsung Electronics and SK Hynix are planning to postpone factory expansion and capacity expansion due to slowing customer demand, which will lead to a sharp drop in the price of DRAM memory and NAND flash memory in the first half of 2019. Of course, they don't want to see that.

Recently, DRAM memory contract prices have shown signs of significant decline. It is expected that with sufficient supply and oversupply, DRAM contract prices will begin to drop significantly in the fourth quarter of this year.

In terms of NAND flash memory, although the third quarter is the traditional peak demand season, the global market supply is still sufficient this year. The capacity of 64-layer and 72-layer stacked 3D flash memory continues to increase. However, due to the saturation of the notebook and smartphone markets, demand growth is limited.

In the meantime, a large number of NAND flash memory chips are accumulated in the channel supply chain, further leading to a price decline. The contract prices are forecasted to fall by 10-15% in the third quarter of this year, exceeding expectations, and will drop another 15% in the fourth quarter.

For manufacturers and channel supply chains, the price of DRAM memory and NAND flash memory will be under great pressure in the first half of 2019. Of course, it is absolutely a good thing for consumers.

At present, Samsung has slowed down the expansion of 3D NAND flash memory capacity, pushing new production lines to the first half of next year, and suspends plans to build new 1ynm DRAM memory chip factories in Hwaseong and Pyeongtaek.

Prior to this, Samsung had planned to expand the output of DRAM memory chips by 30,000 wafers per month from the third quarter of this year.

It happens that there is a similar case. SK hynix has also delayed the expansion of 3D NAND flash chip capacity.

In short, the price of memory and flash memory (SSD) will gradually slow down in the future. But don't expect too much decline. because of the source control.