The global drop in demand for electronic products is also hitting the storage industry hard. Bloomberg speaks of a “historic crash”. This also affects the market leader Samsung, which is able to maintain its lead despite stronger competition. In view of the threat of high losses, Samsung could reduce production.
The said Bloomberg (Paywall) report speaks of a historic crash for memory chips, which threatens to wipe out revenues. The declining demand for “gadgets” has dealt the competitors Micron and SK Hynix a “serious blow,” it said. The quarterly figures from market leader Samsung, which will be published tomorrow, January 31, 2023, are therefore eagerly awaited.
Samsung is said to be considering cutting production
If information from The Korea Economic Daily is accurate, Samsung is heading for “a massive operating loss.” Therefore, Samsung is now seriously considering reducing the production of memory chips. So far, Samsung has declined to take such action, while others such as Micron have already taken action over the last year.
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Falling gadget demand has dealt massive blow to Hynix, Micron
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The chip warehouses are about to overflow
The problem: If the production volume remains the same, the chips literally pile up in the warehouses because too few of them are purchased. The oversupply also causes a drop in prices, from which end customers ultimately benefit, but chip manufacturers lose revenue. The fact that global storage production has been increased accordingly in recent years due to a demand boom fueled by the pandemic is now leading to a worsening of the situation. So now it's time to command back to minimize casualties.
Current market shares for DRAM and NAND
It remains to be seen how large the losses at Samsung will be . The numbers are an important indicator of the mood in the industry, after all, the South Korean manufacturer is by far the leader in both DRAM chips for main memory and NAND chips for mass storage.
According to statistics released by Business Korea, Samsung has a 40.6 percent DRAM market share ahead of SK Hynix at 29.9 percent and Micron at 24.8 percent. When it comes to NAND, the competition has already caught up significantly and Samsung still has 31.6 percent ahead of Kioxia with 21.1 percent and Sk Hynix with 19 percent.
If you add up the shares of Kioxia and Flash partner Western Digital, both come to 33.5 percent and together already have more of the market than Samsung. Only recently there were rumors about a possible merger, which would create a new NAND market leader. But nothing concrete so far.