Samsung reduces RAM production to increase profits and maintain expensive memories

Samsung and SK Hynix have confirmed that the DRAM shortage is not expected to be resolved before the first half of 2027. The two giants, which control around 70% of the global market, warned investors that supply will remain restricted for years.

The two companies are prioritizing long-term profitability rather than trying to flood the market with new chips to lower costs for consumers. And, for those who expected a relief in prices, this is bad news.

From a commercial perspective, however, it is necessary to understand the companies side. It makes no sense for them to invest heavily in new factories and increase production if, in the short term, demand will reduce and they will have new expenses to reduce production (not counting possible layoffs).

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70% of demand

According to sources from the South Korean website Hankyung, Samsung is only able to fulfill around 70% of current orders. To make matters worse, the company began to refuse long-term contracts with large clients.

The strategy is clear: the two companies do not want to stabilize prices at current values, as they bet (and predict) that the value of the component will skyrocket even more in the near future. In a recent meeting with investors, Samsung explained the strategy it plans to follow.

And instead of rapidly expanding facilities, the plan is to follow a strategy of maintaining long-term profitability. That is, the objective is “minimize the risk of oversupply through a capital expenditure strategy”.

For SK Hynix, the scenario is not very different. The company stated that, even investing around 30% of its sales in new factories in 2026 for the new 10nm generation, it is “difficult to resolve the lack of supply” in the short term.

Prices rising

It’s not new that memory prices are rising. In October, memory prices had risen by 50%, in November they had doubled, with 16 and 32 GB modules reaching an all-time high. And memory prices aren’t the only drawbacks caused by the rapid expansion of AI.

Silicon Valley, for example, faced energy shortages that left mega data centers unusable.

At the end of last month, Samsung began large-scale production of GDDR7 memories. Which could help stabilize prices, but clearly they will remain stable at a higher level.

In Brazil, prices can be felt. A month ago, a Kingston Fury Renegade XMP with 16GB and 7600MT/s cost R$838.99. Today it costs R$ 906.99. And other kits that we reported in the comparison are sold out

Fonte: Hankyung, via WCCFTECH.

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