Samsung's Dramatic 16nm DRAM Production Revival

Prominent players in the memory storage industry, including Samsung Electronics, have been proactively responding to the challenging market conditions since 2023. Reports indicate that while Samsung has gradually resumed production in the DRAM sector, it has continued to reduce NAND Flash production while focusing on enhancing the yield of high-end products.

As per a report from Korean media outlet Alphabiz, Samsung resumed production of 16-nanometer (1z) DRAM chips in early September 2023, achieving a remarkable 100% operational rate. It is speculated that Samsung intends to leverage this 16-nanometer DRAM production as a catalyst for rapidly scaling back production cuts in other semiconductor product lines.

Insiders within the industry who are privy to Samsung's strategy suggest that the company perceives the semiconductor market to have reached its nadir. Consequently, they estimate that within the next 2 to 3 months, Samsung will be implementing measures to restore semiconductor production capacity, starting with the normalization of 16-nanometer DRAM production. However, it's important to note that Samsung has not officially confirmed this information and has indicated that any disruptions in production cuts and the revival of production volumes will be addressed during the next earnings conference.

During its Q2 2023 earnings conference, Samsung had previously announced its intention to expand production cuts in the latter half of 2023, with a primary focus on NAND. Even if the reports of DRAM production resumption are accurate, it is unlikely that Samsung will rapidly adjust its production cut strategy for NAND, given that NAND demand is comparatively weaker than that of DRAM. Korean media outlet ZD Net Korea has observed that while Samsung is actively reducing NAND production, its emphasis remains on improving the yield of high-end products.

Notably, Samsung Electronics commenced mass production of eighth-generation V-NAND in November 2023. However, initial reports suggested that the yield during the early production phase was suboptimal, falling below 50% in the first half of 2023. Presently, the yield has improved to approximately 60%. Industry experts assert that the yield of Samsung's eighth-generation V-NAND continues to exhibit consistent monthly improvement, though it has yet to reach the typical levels of 80-90%. Nevertheless, the pace of improvement remains noteworthy.