Japanese media: NAND memory chip makers start a wave of production cuts
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Update time : 2023-08-14 10:49:48
The deterioration of the market of NAND memory chips tends to be long-term, and each manufacturer will further reduce production. Japan's Armor Man has decided to postpone the commissioning of its new factory; South Korea's Samsung Electronics and SK Hynix are also expected to further increase their production cuts. As the demand for digital products such as smart phones has not recovered, the oversupply is difficult to eliminate. Some research institutes say that the possibility of industry reorganization is strengthening in the face of this severe market situation.
As the demand for long-term NAND has not yet recovered, Armor Man has postponed the commencement of production at the production plant to be constructed in Kitakami, Iwate Prefecture, Japan, from within 2023, as originally scheduled, to after 2024. In addition, the delivery of plant equipment has also been delayed.
ArmorMan's investment scale for the plant is approximately 1 trillion yen, with a floor area of approximately 30,000 square meters, and it will be the world's leading semiconductor memory chip production base upon completion. When the plant's construction was announced in March 2022, demand driven by the Shinkan Epidemic still existed, when semiconductor shortages became a worldwide problem and companies accelerated capacity enhancement. However, from the second half of 2022, the semiconductor industry went into decline due to the global recession and other factors. Armor Man reduced the amount of wafers put into production lines in October 2022 by 30%. Company executives said, "We have never experienced such a severe memory chip slump in the past."
The oversupply problem is difficult to solve, and NAND original makers have to launch production cuts. Samsung held a conference in late July, saying that it would continue to cut production in the second half of 2023, and SK Hynix's CFO also said at a conference in late July that "the inventory level of NAND is very high, and production will be further reduced by 5 to 10 percent." Manish Bhatia, vice president of Micron Technology, also said, "It will make the cut in the number of wafer inputs close to 30%," making clear the policy of further production cuts.
The downturn in NAND memory chips has also affected manufacturing equipment, and in July, the Japan Semiconductor Manufacturing Equipment Association sharply lowered its 2023 revenue forecast for Japanese manufacturing equipment. The reason given was that "demand for semiconductor memory (equipment) is lower than expected at the beginning of the year". It is expected that the recent AI artificial intelligence boom continues, the demand for DRAM in this area will increase by 8 times, while NAND will increase by 3 times.
A Japanese analyst, Masahiko Ishino, said the DRAM market has bottomed out, and NAND demand may be catching up as well. In addition, the industry's view of the need to push forward with industry restructuring is also growing. Western Digital, Armor Man and other companies since October to December 2022 operating losses, can not see the prospects for improvement. "There is an urgent need to improve operational efficiency, such as cooperation with vendors that can manufacture DRAM, etc.," said Akira Minamikawa, an analyst at research firm Omdia.
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