Samsung reportedly cuts output of standard DRAM, prices may rise

Samsung Electronics has reportedly decided to reduce production of standard dynamic random access memory (DRAM), which could cause increase of DRAM prices in the coming months. The world’s No. 1 maker of computer memory will increase production of LPDDR in a bid to supply enough memory to Apple, which is gearing up to introduce new iPhone handsets.

Samsung will cut DRAM production by around 30 per cent, reports CTimes, citing Taiwanese Economic Daily News. The company plans to use manufacturing capacities currently utilized to make standard DRAM to produce mobile DRAM used in smartphones. Since Samsung’s offering of standard memory will drop, prices of such memory will likely increase in August or September.

Apple’s next-generation iPhone will integrate 2GB of LPDDR4 memory instead of 1GB, which means that the company will have to purchase considerably more memory ICs [integrated circuits] than last year. In a bid to ensure that it has enough DRAM for its next smartphones, Apple will purchase DRAM not only from SK Hynix and Micron, but also from Samsung.

Demand for personal computers has been decreasing for several quarters, causing oversupply of DRAM. As a result, memory prices have been declining for months as well. Samsung’s decision will likely help DRAM prices to rebound.

Samsung did not comment on the news-story.

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KitGuru Says: Samsung’s decision to cut DRAM production is a good news for companies like Micron Technology and SK Hynix, who naturally suffer from low prices of DRAM.

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