Meaningful Level
An analysis has been made that Samsung Electronics has started to cut production of NAND flash, centering on its memory semiconductor plant in Xian, China.
According to Taiwanese market research firm TrendForce on April 19, Samsung Electronics will adjust its NAND production capacities in the second quarter of this year to 620,000 units of 12-inch wafers per month. The figure is a 5.34 percent cut in production compared to the fourth quarter of last year.
In particular, during the second quarter, the Korean semiconductor giant made a big production cut at the Xian semiconductor plant, which is the chipmaker’s only memory production base. In the case of China’s Xian Plant 1, it is expected to cut production to 110,000 sheets per month, a 12 percent decrease from 125,000 sheets per month in the fourth quarter of 2022. In addition, Xian Plant 2 is expected to roll out 135,000 sheets, a decrease of about 7 percent from the previous 145,000 sheets. The Xian plant accounts for about 40 percent of Samsung Electronics’ total NAND production. It mainly produces 128-layer (V6) NAND flash memory.
On April 7, Samsung Electronics announced a production cut in memory semiconductors along with an announcement of provisional earnings in the first quarter. At the time, the company explained, “We focused on an advanced process with high technical difficulties and a conversion to DDR5 and LPDDR5 DRAM,” adding, “We are adjusting memory production to a meaningful level.” Industry insiders analyzed that the production cut will be carried out mainly in production of DRAM, which have shown high profitability.
However, industry observers believe that Samsung Electronics, which has a very high share (more than 30 percent) of the global NAND flash market and unrivaled cost competitiveness, chose to cut NAND flash production because the current memory market situation is bleak.