According to analysts in the PC storage industry, the current price reductions on memory & SSDs will have drastic effects due to manufacturing costs afflicted with less overhead. In turn, major manufacturers such as Samsung, SK Hynix, and Micron will have to undersell and overprice their products to "boomerang" sales back before the price drops.
Samsung to reduce shipments and raise prices on memory to counter lack of sales
SK Hynix and Micron have already reported production cuts over the last few quarters, but now Samsung is considering following suit, according to the latest report by Citigroup.
The price decline of NAND flash memory chips is expected to narrow due to supply cuts by major manufacturers such as Micron and Kioxia, and market demand is likely to bottom out in the first quarter of 2023.
Sources in the storage marketplace state that Samsung's first-quarter semiconductor sales will lose close to one trillion dollars and are expected to double in the next quarter. If the company does not take drastic measures to fix NAND memory prices, reducing below the manufacturer's retail pricing, it may permanently lose its place in the industry.
TrendForce reported a ten to fifteen percent loss estimated for the first quarter of this year for NAND flash memory, with an expected loss on solid-state drive pricing to be anticipated.
Sanjay Mehrotra, CEO and President of Micron, met with President Biden earlier this year to discuss the semiconductor chip shortage. During the talks, Mehrotra addressed the possibility of relying on partnerships with private sectors to assist with placing the United States in better positioning of the chip market. He also discussed that the company would invest $150 billion over the next decade to increase research and development and manufacturing memory, including SSDs.
Partnering with private sectors would involve Asian nations, one being China. Due to recent global conflicts, China has been cut off from resources outside its borders. This has been attributed to the difficulties with the memory marketplace and others and will continue. Unfortunately, it is unknown when any affected markets will improve, which could mean more risky business practices to counter losses seen overall.
News Source: Kuai Technology
