Samsung denies insufficient demand leading to DRAM price cuts: no major changes in DRAM demand

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Unlike NAND flash memory prices, which have turned from rising to falling, memory chip prices remained high in 2018. The difference is that the memory price increase in Q1 and Q2 this year has declined, with the price increase only around 5%, while memory prices in Q3 and Q4 are generally bearish, mainly due to insufficient market demand, especially the sluggish smartphone season. Recently, Intel's insufficient 14nm production capacity has made PC market demand even worse. TrendForce believes that memory and flash memory prices in Q4 will drop more than expected.

Regarding the news that insufficient demand for memory chips may lead to a price reduction of memory, Samsung CEO Kim Ki-nam, who is in charge of storage chips, foundry and other businesses, said that there will be no major changes in memory demand by the end of this year, and that memory chip demand will continue to be strong in 2019, indirectly denying the possibility of a price reduction of memory chips.

South Korean media reported that Samsung Electronics Vice President and CEO of Device Solutions Kim Ki-nam was interviewed by reporters at a company event a few days ago. When asked about the decline in demand for memory chips, he said, "At least before the fourth quarter of this year, there will be no major changes in the market demand for memory chips."

Will the strong demand in the memory market in 2019 come to an end? Jin Qinan predicts that the demand in the memory market will remain strong next year.

Samsung Electronics' chip business operating profit reached US$10.2 billion in the second quarter of this year, a year-on-year increase of 44%.

While Samsung denied that memory demand was declining, investment banks such as Goldman Sachs and Stifel Nicolaus warned that the memory chip market would deteriorate by 2019, believing that the fundamentals of DRAM memory and NAND flash memory were weak. This move caused Micron's stock price to fall continuously, with the stock price falling 12% this week.

In response to the price cuts of memory and flash memory chips, Digitimes previously quoted industry insiders as saying that Samsung and SK Hynix both plan to postpone their capacity expansion plans. Samsung is said to have suspended plans to add new production capacity for 1ynm DRAM chips at its Hwaseong and Pyeongtaek factories in South Korea. Samsung originally planned to increase its production capacity by 30,000 wafers per month in the third quarter.

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