Samsung to Cut NAND Flash Production at Xi'an by 10%

According to reports, Samsung Electronics has decided to reduce the wafer input for NAND Flash production at its Xi'an factory in China by over 10%. This move appears to be aimed at safeguarding revenue as the global oversupply of NAND Flash persists, driving a significant price drop expected this year.

Currently, the Xi'an NAND Flash facility produces approximately 200,000 wafers per month. Following this adjustment, monthly output is projected to decrease to around 170,000 wafers. Additionally, Samsung plans to scale back operations at its Hwaseong production lines 12 and 17 in South Korea, further reducing overall capacity.

Market research firm TrendForce recently revealed in a report that NAND Flash suppliers are facing mounting inventory levels and weakening demand for orders in the first quarter of 2025. Contract prices are forecasted to decline by 10% to 15% quarter-over-quarter.

Samsung previously implemented production cuts in 2023 to mitigate losses caused by the NAND oversupply. At that time, the company reduced wafer inputs by nearly 50%, prompting other major manufacturers like SK Hynix, Micron, and Kioxia to follow suit, which eventually stabilized prices. As demand recovered, Samsung increased its monthly output to approximately 450,000 wafers.

The NAND Flash market is marked by intense competition among key players, including Samsung Electronics, SK Hynix, Kioxia (Japan), Western Digital (USA), Micron (USA), and Yangtze Memory Technologies Corporation (YMTC) in China. While Samsung remains the leader in production capacity and market share, fierce price competition in critical sectors such as PCs, mobile devices, and servers has begun to impact its revenue.

According to DRAMeXchange data, as of October 2024, the fixed transaction price for mainstream NAND Flash products (128Gb 16Gx8 MLC) used in memory cards and USB drives fell to $3.07, a 29.18% drop from $4.34 in September.

In contrast, SK Hynix has announced plans to gradually increase NAND production this year. The company has shown growing confidence in its NAND technology, achieving strong sales and profitability, particularly in the enterprise SSD segment.

TrendForce noted, "The NAND market has experienced more than a year of stagnation due to oversupply. While enterprise SSD products for AI data centers brought some optimism earlier this year, the market has once again returned to a critical crossroads."