January 13, 2025 /SemiMedia/ — Samsung Electronics has reportedly decided to reduce NAND flash production at its Xi'an plant in China. This move aims to address the global NAND oversupply that has led to sharp price declines, thereby safeguarding the company's revenue.

Industry sources indicate that Samsung plans to cut wafer input at its Xi'an facility by over 10%, reducing monthly wafer production from approximately 200,000 to 170,000 wafers. Additionally, the 12th and 17th production lines at its Hwaseong facility in South Korea will also adjust output, further lowering overall capacity.

Samsung initially responded to the NAND oversupply issue in 2023 by significantly cutting wafer input, nearly halving production to stabilize market prices. As demand recovered, monthly production rebounded to around 450,000 wafers. However, the market is once again under pressure due to intensified competition in key sectors such as PCs, mobile devices, and servers, impacting Samsung's earnings.

Despite maintaining its leadership in the NAND market, Samsung faces fierce competition from SK Hynix, Micron, Kioxia, Western Digital, and China's YMTC. Notably, SK Hynix plans to gradually increase NAND production this year, driven by strong performance in enterprise SSDs.

According to DRAMeXchange, the fixed transaction price for general-purpose NAND flash (128Gb 16Gx8 MLC) fell to $3.07 at the end of October 2024, a 29.18% decline from $4.34 in September.

TrendForce noted: “While enterprise SSD demand from AI data centers provided a temporary boost, the NAND market has returned to a crossroads of stagnation due to prolonged oversupply.”