Samsung plans to lower memory supply in order to keep prices high

Samsung's RAM is used in everything, from desktops to laptops to phones. This supply decrease may affect more than DIY PC parts. (Source: GameRevolution)

While DRAM prices have been dropping since January of this year, the price of DDR4 memory is still significantly higher than it was in 2016. Now, during a time of reduced demand, Samsung may be planning to cut down on supply in order to keep today's prices.

Matthew Connatser, Published 09/22/2018

According to a source exclusive to Bloomberg, Samsung is "planning to curtail growth in memory chip output next year to keep supplies tight amid an expected slowing in demand." Since 2016, demand has outpaced supply, and in January prices reached an eye watering increase of about 100%. While prices have started to trend down since then, this new announcement could signal either yet another round of increasing prices or at least an end to decreasing prices.

As there are only two other major RAM suppliers in the world (Micro and SK Hynix), Bloomberg says it is likely that Samsung's competitors will follow this pricing strategy. Anthea Lai, one of Bloomberg's analysts, says this on the situation:

If Samsung does cut its DRAM bit growth, it shows the company is happy with the current oligopoly market structure. 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.

Samsung branded RAM is shipped in a variety of electronics, including several OEMs' PCs as DDR4, the new RTX 2000 series as GDDR6, and in Nvidia's Volta and AMD's Vega GPUs as HBM2. Weak supply could affect the supply and prices of other products reliant on Samsung memory, and if Micron and SK Hynix follow Samsung's lead, then the two other producers may not be able to increase supply.