South Korean media: Chinese enterprises launch an offensive, and Samsung Electronics' memory production plummets by more than 100 billion in one year! On June 5th, South Korean media "Newsis" published an article stating that the semiconductor memory production of Samsung Electronics has plummeted by more than 100 billion in just one year, drawing much attention to the underlying reasons. Despite the decline in production, memory sales revenue has increased. Analysts say this is due to Samsung Electronics' recent decision to significantly reduce the production of older memory types like DDR4, while focusing on higher-value-added memory such as DDR5. With Chinese companies launching a price offensive, Samsung Electronics seems to be accelerating its "de-commoditization" strategy. According to Samsung Electronics' quarterly reports, the company's memory production in the first quarter of this year was 468.47588 billion units, a reduction of over 100 billion compared to the same period last year (577.1868 billion). In percentage terms, this represents a 23% decrease. Samsung Electronics' memory production operating time in the first quarter of this year was 21,600 hours, only a reduction of 240 hours compared to the same period last year (21,840 hours), but the actual production volume decreased significantly. Analysts believe that the main reason is Samsung Electronics' recent significant reduction in the production of older memory models and a shift toward high-value-added memory production. The production share of old DRAMs like DDR3 and DDR4, as well as old high-bandwidth memories (HBM) like the third-generation HBM2E, has been greatly reduced. On the other hand, they are implementing a strategy to increase the sales of high-priced products such as DDR5 and the latest HBM. This is a strategy to reduce production and earn substantial profits. In fact, Samsung Electronics' memory sales revenue reached 19.1 trillion won in the first quarter of this year, a 9% increase from 17.5 trillion won in the same period last year. Amid the price offensive by Chinese companies, Samsung Electronics is accelerating the de-commoditization process. Chinese memory companies such as Changxin Memory are mass-producing older DRAMs and DDR4 at prices far lower than those of South Korean products. HBM is currently in mass production of the third-generation HBM2E and plans to release the fourth-generation HBM3 this year. Older memory types can no longer generate high profits, so Samsung Electronics is rapidly shifting toward high-profit products. Observers believe that global memory manufacturers such as Samsung Electronics, SK Hynix, and Micron will stop producing older memory types within this year. A South Korean industry insider said, "Samsung appears to be moving toward non-commoditization faster than expected. Whether it can successfully improve its structure and focus on high-value-added products this year is the key." Original source: https://www.toutiao.com/article/1834055349407755/ Disclaimer: This article solely represents the author's personal views.