Samsung's DRAM production is expected to rise in only 'single-digit' percentages, despite global demand accelerating significantly, indicating that the supply chain will remain constrained.
Samsung's DRAM Output Increase Is 'Marginal' Compared to Where the Demand Is Heading
The memory supply chain bottleneck has forced companies like Samsung, Micron, and SK hynix to take "emergency" measures to address the demand coming from the AI sector. Apart from reallocating DRAM supply from consumer production, Samsung also plans to increase DRAM production by expanding its Pyeongtaek campus in South Korea. However, according to DigiTimes, Samsung's total DRAM wafer output is projected to increase by just 5% this year, approaching eight million wafers. The increase in production is significantly lower than the projected demand for this year.
We previously discussed in a report that memory manufacturers like Samsung and SK hynix are hesitant to ramp up DRAM production, as expanding facilities too aggressively could lead to a supply glut once AI demand settles in. However, recent estimates suggest that DRAM customer requests could rise by up to 30% YoY, with the majority driven by hyperscalers and chip manufacturers such as AMD and NVIDIA. In contrast, Samsung's supply increase appears insignificant and will not help the supply chain in the short term.
More importantly, many of the upcoming production facilities, such as SK hynix's M15X fab, Samsung's expanded Pyeongtaek campus, Micron's upcoming Idaho fab, would likely be targeted towards catering to the HBM demand, since both of the Korean memory giants are moving aggressively with existing and future HBM technologies (HBM3, HBM3E, and HBM4). The consumer segment isn't expected to benefit from the DRAM output expansion anytime soon, and it won't be wrong to say that memory shortages will persist for them for much longer.
You probably have heard this a few times now, but memory shortages aren't looking to stop, at least until 2028, and as Micron's VP disclosed to us, the main reason why they are intensifying with passing time is that the AI TAM for memory suppliers is consistently increasing.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
Follow Wccftech on Google to get more of our news coverage in your feeds.
