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Samsung Reduces Standard DRAM 30%, Shifts to Mobile DRAM

By Korbin Lan
Published: Aug 03,2015

TAIPEI, Taiwan - According to Taiwan’s Economic Daily News, Samsung Electronics is planning to reduce its standard DRAM production by 30% and shift towards the production of Mobile DRAM in response to shipments of Applies new phones. At the same time, they have notified OEM manufacturers that beginning in August, they will not reduce DRAM sales prices. As a result, DRAM prices may increase.

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The report pointed out that Apple’s supply chain providers have revealed that Apple’s new iPhone 6s and 6s Plus will upgrade to having A9 processors. At the same time, their memory will be increased from 1GB to 2GB. Original suppliers Micron and SK Hynix will be unable to meet the supply requirements; therefore, Apple will begin purchasing from Samsung.

DRAM distributors stated that Samsung has already formally notified OEM manufacturers that at the end of next month they will ship out US$20.50 to $21 DRAM modules, which are the lowest prices this quarter. However, beginning in August, they will not lower the price further. Samsung will reduce their production of standard DRAM by 30% in order to shift to producing the newest 8GB LPDDR4 Mobile DRAM and put all of their efforts into meeting production requirements for Apple’s new phones.

Samsung is currently the world’s largest DRAM producer, and at the beginning for this year they spared no efforts in manufacturing 20nm standard DRAM. However, lower than anticipated PC sales brought about an overproduction of standard DRAM relative to global demand and price decreases of over 10% in the second quarter, and this impacted DRAM manufacturers’ profit performance.

Taiwanese DRAM manufacturers Nanya and Inotera originally expected profits to slide in the third quarter; however, because of Samsung’s shift in supply strategy, this decline may be reversed.

(TR/Phil Sweeney)

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