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The world’s largest producer of the increasingly ubiquitous NAND and DRAM chips that power our smartphones and other devices is getting ready to ease up on production of the key components, according to a report on Monday, a move that could drive up prices.
Bloomberg reported the plans to keep supplies tight on Thursday, amid expectations that demand is set to slow. The weak forecast will likely mean cutting back investment and limiting supply to boost prices, the report said, a conclusion that was confirmed by people briefed on Samsung’s intentions.
“If Samsung does cut its DRAM bit growth, it shows the company is happy with the current oligopoly market structure,” Anthea Lai, an analyst at Bloomberg Intelligence was quoted as saying. She added that DRAM prices are likely to stay higher.
Among the three companies that dominate the supply of NAND and DRAM chips, Samsung is the largest producer. But shares of the conglomerate have fallen more than 7% this year amid weakening growth in smartphone sales.