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Samsung Electronics and SK Hynix put the brakes on

by on06 September 2018

Expansion plans on hold

Samsung Electronics and SK Hynix both are putting the brakes on their plans to expand their production.

According to Digitimes, the pair have noticed a slowdown in customer demand will be dragging down DRAM and NAND flash memory prices through the first half of 2019.

The global NAND flash market has remained in oversupply in the third quarter of 2018 which should have been the time it flogged of shedloads. Suppliers' continued ramp-ups of 64- and 72-layer 3D NAND flash output coupled with the limited demand growth due to the saturated notebook and smartphone markets and all this bought down memory prices.

It was made worse by the fact that the industry supply chain is flooded with substandard NAND flash chips, which hurt memory prices. NAND flash contract prices are likely to fall by a larger-than-expected 10-15 percent sequentially in the third quarter and another 15 per cent in the fourth, the sources said.

DRAM contract prices have also shown signs of falling, the sources indicated. The memory contract prices are expected to start falling in the fourth quarter as the market becomes oversupplied, the sources said.

Samsung used to supply 3D NAND chips for its own SSDs and other products started flogging them off externally in the third quarter of 2018. It is slowing down its 3D NAND chip output, with new production capacity unlikely to go online until the first half of 2019.

Samsung has also put on hold its plans to build additional new production capacity for 1ynm DRAM chips at its fabs in Hwaseong and Pyeongtaek. The chip vendor previously planned to build an additional 30,000 wafers monthly for DRAM memory starting the third quarter of 2018, the sources said.

SK Hynix has decided to slow down the pace of its new 3D NAND chip capacity expansion project, Digitimes said.

Last modified on 06 September 2018
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