Samsung to curb ram production to keep prices high

Samsung plans to slow its growth in memory chip production next year, to keep supplies tight, amid an expected slowdown in demand, all to avoid falling prices.

Samsung to Slow Expansion of Memory Manufacturing Capacity

The move would help maintain or boost semiconductor prices. Samsung now expects less than 20 percent growth for dynamic random access memory, and 30 percent increase for NAND flash. Samsung said earlier this year that it expected increases of 20 percent for DRAM and 40 percent for NAND in 2018.

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The semiconductor industry is known for its boom and bust cycles, and investors have become increasingly concerned that Samsung and its peers are heading for a slowdown, as demand softens after years of record gains. If Samsung, the world's largest producer of Nand and DRAMs, cuts production, that can help prop up prices alongside SK Hynix Inc. and Micron Technology Inc.

Shares of Samsung Electronics fell less than 1 percent in Seoul. Just hours earlier, Micron, the largest US memory chip maker, gave a revenue forecast that fell short of analyst estimates, adding to concerns that a two-year increase in demand for its products was is fading.

Semiconductors are Samsung's largest and most profitable business, as it produces chips for its own devices and sells to other smartphone manufacturers. The chip division generated operating income of 35.2 trillion won ($ 31.4 billion) in 2017, more than double the previous year, helping the company's profits hit a record high.

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