[NEWS] China continues to butcher one of Samsung’s cash cows

[phillynews215]

Samsung's memory business has been a literal cash cow for the longest time but it's now facing headwinds. The company has fallen behind SK Hynix in the lucrative HBM3E market and it's still waiting on a potentially lucrative order from NVIDIA.

Meanwhile, Samsung continues to face tough competition from Chinese memory makers in the DRAM and NAND segment. Oversupply from Chinese companies saw prices for these products plunge by 20% just last month.

Chinese memory prices are half of what Samsung charges

The pricing issue has been compounded with sluggish demand from device manufacturers, leading to a significant oversupply. The latest data from DRAMeXhange shows that the PC DRAM prices for DDR4 8Gb modules has declined by 20.59% month-over-month to $1.35. This is the lowest price since September 2023 when it was at $1.30.

The decline is much more significant for NAND flash memory that's used in USB flash drives and memory cards. It was down 29.8% for the 128Gb modules to $2.16 last month. NAND prices have fallen more than 50% this year, down at their lowest level since August 2015.

Market data shows that the price of DDR4 chips from Chinese companies is about half that of the prices that Samsung Electronics charges for its products. It's no surprise that Samsung's has remained unable to bring in the sort of money from this segment that it has done for many years.

Samsung has joined other leading memory makers in cutting production of these products to reduce inventory and stabilize prices. It's unlikely that the situation will improve in the near future as Chinese manufacturers continue to ramp up their production capacity.

CXMT, a Chinese memory maker, has grown its production capacity from 40,000 wafers per month in 2020 to 200,000 wafers per month in 2024. It's now the fourth-largest producer by capacity in the world.

Samsung is now focusing more on next-gen products, including HBM4, to further diversify its product mix and improve profits amid other mounting challenges for its semiconductor division.

The post China continues to butcher one of Samsung’s cash cows appeared first on SamMobile.



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