According to media reports, this decision forms part of a strategic effort to protect profitability at a time of continuing global NAND oversupply, which is leading to a projected sharp price decline this year.
This move come in contrast to SK Hynix, which has announced plans to expand its NAND supply, and suggests that Samsung’s current production processes may be struggling.
Industry sources have said that Samsung plans to reduce NAND wafer input at the Xi’an plant by more than 10%, lowering its average monthly output from 200,000 wafers to approximately 170,000.
Additionally, production at lines 12 and 17 in Hwaseong will also be adjusted downward, further reducing overall capacity.
In 2023, Samsung implemented production cuts to mitigate losses caused by the NAND oversupply, slashing wafer input by nearly half. As demand rebounded, however, Samsung increased production to around 450,000 wafers per month.
Currently, the NAND market is highly competitive, with players like SK Hynix, Japan’s Kioxia, Western Digital and Micron, and China’s YMTC competing for market share.
While Samsung remains the leader in production capacity and market share, intensified price competition in key sectors such as PCs, mobile devices, and servers has eroded profit margins.
According to TrendForce data, Samsung ranked first in NAND flash revenue market share in Q3 2024, capturing 35.2%. Closely following was SK Group with 20.6%.
SK Hynix plans to increase its NAND output this year. Said to be confident in its technology it sees an opportunity to gain a competitive edge over Samsung.
Meanwhile, other reports from Korera suggest that Japan’s Kioxia is ramping up its advanced NAND production capacity. The company has expedited its equipment investment plans, initially slated for early 2024, by placing orders at the end of last year.
Kioxia intends to invest in next-generation NAND in the second half of this year, aiming to close the gap with competitors like Samsung and SK Hynix. This move is expected to intensify the technological competition within the NAND industry.
