Samsung is planning to significantly adjust its memory production line layout to meet the market demand for DDR memory modules, thereby maximizing profits during the current memory super cycle.
Currently, the shortage of memory chips has reached an unprecedented level, with some memory module prices exceeding the $1,000 mark. From the market perspective, the tight supply situation is expected to persist for several more quarters. Industry media reports indicate that due to fierce competition in the HBM (High-Bandwidth Memory) sector, which has impacted profitability, Samsung, a leading global memory manufacturer, is planning to adjust its production strategy by shifting more production capacity to DDR and LPDDR modules to diversify risks. Meanwhile, the spot price of DDR5 has hit new highs for consecutive days, presenting an excellent market opportunity for Samsung.
Samsung is expected to shift more production lines to 1c-nanometer DRAM technology, which will free up more production capacity for DDR5, LPDDR5X, LPDDR6, and GDDR7 modules. Notably, the gross profit margin of Samsung’s RDIMM memory modules currently stands at a high 75%. This production capacity adjustment will ultimately enable Samsung to achieve higher returns in the general-purpose DRAM sector than in HBM. It is anticipated that most of the newly added production capacity will prioritize meeting the needs of the artificial intelligence (AI) sector, particularly targeting cloud computing service providers and AI giants involved in data center construction. As a result, the consumer market may face supply pressure.
This is precisely why Micron has decided to exit the consumer market. Demand from the artificial intelligence (AI) sector brings more substantial gross profit margins, ultimately ensuring that memory suppliers can maximize profits during this super cycle. For gamers, the current market environment shows no sign of improvement, and how the subsequent situation will evolve warrants close attention.