SK hynix plans to reduce production of 3D NAND flash memory by 15% this year to slow down capacity expansion
Recently, SK hynix announced that it will reduce the capacity of 3D NAND wafers ahead of schedule and re-adjust its M15 and M16 fab assembly plans to reduce capital expenditures. In fact, due to the oversupply in the 3D NAND memory market, manufacturers have had to cut production to stabilize prices. For example, earlier this year, SK hynix had planned to reduce 3D NAND wafer production by 10%. However, according to the latest plan, it has been adjusted to reduce production by 15% .
In the second quarter of 2019, SK hynix's NAND flash shipments increased by 40% quarter-on-quarter, as the company increased its production of 72-layer 3D NAND. However, the average price of 3D NAND fell by 25%, which is the main reason why SK hynix decided to cut production.
In addition to reducing the capacity of 3D NAND wafers, SK hynix will slow down the clean room space expansion of the M15 plant near Cheongju, South Korea (which produces DRAM and 3D NAND) and delays the installation of equipment at the M16 plant near Icheon city.
Although SK hynix did not give a detailed explanation, it said that compared with 2019, the decision will significantly reduce capital expenditure in 2020, which means that the new capacity of the plant may not be released next year.