Samsung reportedly plans to lower chip growth targets to maintain high DRAM/NAND pricing

A report from Bloomberg has claimed that Samsung plans to reduce their DRAM/NAND production growth estimates to maintain high DRAM/NAND pricing until 2019. 

Earlier this year, Samsung expected bit growth, a term for production growth (More bits of memory produced), to be 20% for DRAM and 40% for NAND. Now, Samsung expects bit growth to be less than 20% for DRAM and 30% for NAND flash, significant decreases in potential output. 

Samsung claims that they are “flexibly managing capacity in line with the market supply-demand situation”, though the consequence of this move is undoubtedly bad for consumers, as increased supply would lower the pricing of DRAM and NAND and in turn lower the pricing of a wide range of consumer electronics.  

Right now, Samsung remains the leader of the DRAM market, producing more chips than competitors like Micron Technology and SK Hynix. If Samsung acts alone, the company could lose market share to their competitors while keeping chip prices high. If the company held to their initial plans, they could increase their market share at the cost of lower DRAM pricing. 

DRAM demand has fallen significantly thanks to the weakening smartphone market, a market which has been substantially impacted by high memory pricing.