Nvidia’s latest version of gaming GPUs have crazy prices, but the market for other hardware components has never been better for consumers. Memory chips for SSD drives and DRAM memory modules are very cheap right now, and makers are struggling to adapt their businesses to this new trend.
Samsung is one of the biggest companies in the world that makes DRAM chips, and right now is a very important time in its past. In the first quarter of 2023, the company’s sales dropped by 18% compared to the same time last year, and profits dropped by 95%, which was the worst result in the past 14 years.
In the coming months, DRAM and SSD prices are expected to drop even more around the world, which will affect any efforts that makers make to bounce back. Samsung recently said it was getting ready to cut back on chip production, and now we know that the cut will probably be a big one.
The Korean giant is likely to cut back on making chips for DDR4 memory modules, which will last at least three to six months (two quarters). Samsung’s total wafer output will go down by 5-7%, which is expected to hurt an already struggling market even more.
With an estimated 45% market share, Samsung is the biggest maker of memory chips in the world. This year, the Seoul-based technology company is expected to make 25% fewer DRAM chips, which is likely to have a big effect on the memory market as a whole.
Samsung has made similar decisions in the past, like when it stopped making DDR3 memory units in August 2022. At the time, Samsung was trying to get more companies to use the newer, faster DDR5 memory modules while still serving the DDR4 market. This meant that router makers and other companies still using the slower, cheaper DDR3 modules had to upgrade their memory needs.
In 2022, Samsung not only cut production and made DDR3 modules cheaper, but it also cut the prices of DDR4 and DDR5 chips. The number of people using the higher memory standards went up as a result. Now, people are spending less on high-tech products, and Samsung seems happy to let its chip-making machines rest until the market picks up again.