Samsung's Major Production Reduction Signals Positive Outlook

According to a report from Taiwan's Economic Daily News, Samsung has recently made a significant decision to reduce production. It is estimated that the positive effects of Samsung's production reduction will become evident by the end of the second quarter, easing the current oversupply situation in the market.

In April, Samsung officially announced its production reduction plan, with a specific focus on DDR4. The production decrease in the Hwaseong plant's memory lines is expected to last for at least 3 to 6 months. Analysts predict that while reducing DDR4 production, Samsung will also shift towards DDR5 and LPDDR5 manufacturing and increase the emphasis on advanced fabrication processes to address the issue of oversupply in memory chips.

Industry analysis suggests that it takes approximately three months to manufacture memory chips. The positive effects of Samsung's production reduction are expected to manifest within three to six months, possibly as early as the end of June. As a result, major manufacturers will experience an accelerated depletion of their inventories in the latter half of the year, leading to an improvement in the overall semiconductor industry.

Following Samsung's announcement of its production reduction decision, the memory semiconductor market, which had been in a downward trend, responded positively. The spot price of DDR4 16Gb products started at $4.161 on January 2nd and further declined to $3.90 on February 1st, and $3.570 on March 1st. However, on April 11th, the spot price for "DDR4 16-gigabit (Gb) 2600" DRAM increased for the first time since March 7th last year. This rebound is attributed to Samsung's official announcement of production reduction, which has raised expectations for an improvement in the global industry conditions.