2023 is set to be a very tough year for PC component sales. In fact, from the third quarter of 2022 things are going to go quite badly, and not only in terms of GPUs , but at general levels. Due to the poor sales situation, Samsung has made the decision to reduce the production of DDR4 memory chips in order to improve its economic situation.
Samsung is facing a difficult time, as its revenues have fallen 18% during the first quarter of 2023 compared to the same period of the previous year. However, it has fared much worse in terms of profits, having fallen by 95% , its worst result recorded in the last fourteen years. In other words, the South Korean technology giant has not faced such a difficult situation since the crash of 2008, which led to a deep economic crisis whose overcoming is questioned by many.
The low sales that have been registered for months means that things are getting difficult for companies, but in return the winds are blowing in favor of consumers, who see how the prices of components such as DRAM modules and SSDs do not stop to go down If you are lucky enough to have some money in your pocket, this is a good time to buy components or even renew equipment. Some like NVIDIA decided, at least initially, to bet on high prices based on the good reputation of the brand, but it does not seem that the move has worked out well.
Returning to the topic at hand, Samsung plans to reduce the production of chips for DDR4 memory modules for a period of between three and six months . Samsung’s total entry of wafers will be reduced between 5 and 7 percent, which may have, although it may not seem like it, more negative consequences for a market that is no longer experiencing its best moment.
Samsung is the world’s largest memory chip maker, with an estimated 45% market share. With the announced cuts, the company is expected to manufacture 25% fewer DRAM chips in the year as a whole . On the other hand, this is not the first cut in this regard by the South Korean giant, which in August 2022 made a similar decision when it came to reducing production of DDR3 memory modules.
Samsung’s policy in recent times has been to promote DDR5 memories while continuing to support DDR4. This has meant that manufacturers of routers and other devices have continued to turn to slower, but also cheaper, DDR3 modules to cover their memory needs.
As we have already said, the market is experiencing a very bad time in general, so Samsung has been offering discounts on DDR4 and DDR5 chips in 2022, in addition to reducing and making DDR3 modules cheaper. More and more people are beginning to think that, beyond the bursting of the pandemic bubble, the average consumer profile has changed towards a more conservative one, which is normal if we take into account that the hardware is very powerful to do the tasks basic for a long time.