Samsung to lower memory prices and expand production capacity to regain market share
Samsung is preparing to weather the upcoming 2023 recessionary period in its own typical way by expanding memory production capacity and slashing DRAM chip prices significantly. This way it will be able to preserve and increase its pole position in terms of memory market share and, contrary to its competitors like Micron or SK Hynix, Samsung will be investing in new manufacturing lines, rather than slashing its capital expenditure program and laying off workers.
Samsung did this the last time there was a recession in the IT industry like the one the market is going through now, and it is now projected to add a new line for the novel 12nm DRAM chips which it unveiled not long ago that will increase its total memory manufacturing capacity by more than 10%.
Samsung's commanding share of the IT memory market fell to 40.6% in Q3, and its immediate reaction now is to slash prices and increase production abilities in order to flood the market with cheap DRAM memory chips and grab as much market share as it can from its competitors during the recessionary times. The work-from-home transformation that drove record high IT sales during the pandemic lockdowns pulled latent demand forward, so now computer manufacturers are experiencing a slump in demand forcing them to cut prices, and Samsung has apparently decided to adapt accordingly.
Samsung's capital expenditures for the year are forecast to hit US$42.5 billion and going forward Samsung said it will be betting on the expansion of its memory "P3 and P4 infrastructure, as well as on advanced technologies, such as EUV." The world's largest memory maker is reportedly planning to add 10 more machines for producing with the modern extreme ultraviolet (EUV) lithography method, on top of its current 40 EUV units, too, indicating a serious commitment to remain at the cutting edge of chip production technologies.
Source(s)
