As reported by Bloomberg, South Korean NAND and DRAM manufacturer is planning to slow down its memory chip production to prevent an eventual crash of memory chip prices by keeping the supply low.
According to insiders, the South Koren company is expecting a bit growth of 30 percent for NAND flash memory and up to 20 percent for dynamic random-access semiconductor memory (DRAM).
The bit growth term is a term used to express the predicted rise in demand for NAND and DRAM products represented in bits, and an essential tool used by semiconductor manufacturing companies to measure the market demand.
The South Koreans are at the moment the ones who command the memory chip manufacturing market together with Micron Technology Inc and SK Hynix Inc, and by controlling the number of units produced each year, they can make an educated estimation of how the prices will fluctuate each year.
Samsung is supposedly preparing to reduce memory chip production to keep prices in check
The three memory chip manufacturers who currently dominate the market make NAND and DRAM chips for computers, smartphones, and any other devices that use such components.
Besides the chip business, which generated an operating income of $31.4 billion (35.2 trillion won), Samsung is also involved in LED (light-emitting diode) screen manufacturing for Apple's iOS devices, and it also designs and produces its line of electronics (from smartphones to TVs and home appliances) under the Samsung brand.
Right now, apart from predictions, market studies, and its dominant market position, Samsung cannot be sure that a slowing down of memory chip production will bring the desired results.
However, previous forecasts and supply control actions on Samsung part have been known to help the South Koreans to keep prices in check, often making it possible to raise them above the most optimist estimates.