Since the beginning of this year, the demand for consumer electronics such as smartphones and PCs has continued to decline. The chip market has suddenly entered a downward cycle from a global core shortage. In particular, the shipment volume of memory chips has not only fallen sharply, but the price decline has also continued to expand.
As a result, major memory chip manufacturers began to help themselves. Some began to reduce capital expenditures, some began to lay off employees, and some even began to reduce production. However, Samsung , the most powerful memory chip, has once again bucked the trend, and SMIC has already laid out its plans in advance.
memory chips are the most commonly used among all chips, accounting for about one-third. Among them, DRAM memory and NAND flash memory are the two most used types. However, the global market is basically monopolized by foreign companies.
DRAM is controlled by the three giants Samsung, SK Hynix , and Micron . In 2021, they jointly occupied 94% of the DRAM market share market share . Among them, Samsung ranked first with 43.6%, SK Hynix ranked second with 27.7%, and Micron ranked third with 22.8%. The
NAND market is basically occupied by Samsung, Kioxia, Western Digital , SK Hynix, and Micron, with Samsung still number one.
However, affected by the downturn in the chip situation and US chip restrictions, Micron first issued an early warning and announced a 30% reduction in capital expenditures in 2023, followed by a reduction of DRAM and NAND production by about 20%, and recently announced a 10% layoff next year.
SK Hynix announced that it will reduce capital expenditures by 70-80% in 2023, and recently plans to significantly reduce its team by 30%!
and Japan's Kioxia said that its two Japanese flash memory factories will reduce production. Starting from October, NAND production will be reduced by 30%. Samsung, which ranks first in the global storage market, has only lowered its revenue forecast although its profits have dropped a lot.
A series of actions by major memory manufacturers such as Micron and SK Hynix clearly indicate that the demand for memory chips is shrinking significantly.
This has attracted more attention to Samsung, which ranks first in both DRAM and NAND market shares, and everyone is speculating on what actions Samsung will implement to alleviate the pressure. But what everyone didn't expect was that Samsung did not join the ranks of reductions and layoffs. Instead,
bucked the trend again. The Korean media "Seoul Economic Daily" announced that Samsung still plans to increase the chip production capacity of the largest semiconductor factory next year. To this end, Samsung has also decided to add at least 10 high-end EUV lithography machines next year.
Samsung’s actions are called counter-cyclical expansion. In fact, this concept was first proposed and implemented by Samsung, and it has become the number one storage company in the world. A long time ago, Samsung encountered a downward cycle when competing with Japanese storage companies.
At that time, Samsung chose to continue its aggressive expansion and invested a lot of money in purchasing equipment. However, Japanese storage companies were worried about losses and chose to shrink. As a result, it took Samsung more than 10 years to become the world's largest memory chip company.
Samsung believes that it is easier to buy chip equipment during the down cycle, and the price is still low. It has tasted the benefits of counter-cyclical expansion. Now that the chip market cycle is down and memory chip prices have fallen repeatedly, Samsung still decided to buck the trend.
Samsung’s move is precisely to use this action to continue to consolidate its position in the global memory chip market and further expand its market share. Not only Samsung, my country's memory chip duo Yangtze Memory and Hefei Changxin are also learning from Samsung's model.
In order to break the monopoly of foreign companies in the memory chip market, domestic memory chip companies Yangtze Memory and Hefei Changxin were established. Yangtze Memory focuses on NAND flash memory, and Hefei Changxin focuses on DRAM memory. Both companies are developing very rapidly. It only took
Yangtze Memory 5 years. Last year, it captured 4% of the global market share. It is expected to increase to 7% this year, surpassing Intel and ranking among the top six in the world for NAND, and more production capacity in the second phase of the project is still being expanded.
Hefei Changxin's DRAM technology level has gradually caught up with the world's leading level, reaching a monthly production of 60,000 pieces in 2021, accounting for 4% of the world's major DRAM production capacity. Now the second phase of the project will be put into production next year, and the monthly production capacity is expected to increase to 125,000 pieces.
It can be seen that my country's storage giants are also adopting the counter-cyclical expansion concept proposed by Samsung and strive to continue to break through the tight siege.
also operates SMIC. Nowadays, all major wafer and manufacturers are cutting capital expenditures. Even TSMC has reduced capital expenditures by US$8 billion, but SMIC has raised this year's capital expenditure plan from 32.05 billion yuan to 45.6 billion yuan.
SMIC operates in reverse, making countercyclical investments like Samsung, mainly paying down payments for early orders for long-term delivery equipment. In fact, it is to ensure the subsequent expansion and layout of production capacity. It is to occupy the 28nm mature process market.
is also undergoing counter-cyclical expansion. In comparison, Chinese companies have greater advantages because they are backed by mainland China, the world's largest semiconductor market. However, Samsung is increasingly restricted by new US regulations, and even its storage factory in mainland China is only licensed for one year.
Although mainland enterprises are also affected by the restrictions on of the US chip, in the long run they will realize the independent chip industry chain !
