Samsung and SK Hynix halt expansion plans to prevent SSD and memory price drop

[Reavantos]

Original Article

 

Quote

Samsung and SK Hynix, the first and third biggest semiconductor companies in the world, are both reportedly slimming down their expansion plans for DRAM and NAND chip production. The silicon giants are facing a slump in customer demand, resulting in a global oversupply, and production is being cut to match.

The move comes off the back of a NAND oversupply that has continued throughout Q3 2018, largely expected to be a result of notebook and smartphone markets’ lackadaisical sales. It wasn’t all that long ago that reports of a global oversupply leading up to an inevitable crash in the NAND market were being floated online. This crash was expected to cause a pricing dip all the way down to $0.08/GB. Now wouldn’t that be nice for SSD prices?

I really don't know what to make of this. A lot of the sales data and facts are obfuscated.It "seems" circumstantial, but very suspect. I am curious how the market reacts. This could easily be a PR stunt to trigger more immediate sales or even bulk purchasing bid wars(unlikely but worth mentioning anyways.)
 

[yian88]

indeed SSD prices have gone down heavily and now they try price fixing yet again....

[Wh0_Am_1]

1 minute ago, Reavantos said:

Original Article

 

I really don't know what to make of this. A lot of the sales data and facts are obfuscated.It "seems" circumstantial, but very suspect. I am curious how the market reacts. This could easily be a PR stunt to trigger more immediate sales or even bulk purchasing bid wars(unlikely but worth mentioning anyways.)
 

It sounds to me that Samsung and SK Hynix are just doing their due diligence to balance supply and demand, why make more of it when it's unprofitable, otherwise they would have to do something awkward like what Nvidia with the 20 series due to oversupply with the 10 series, which resulted from Nvidia ramping up production of the 10 series in response to the global GPU shortage.

[Drak3]

That'd be pretty fucking stupid of them, seeing as Micron's doing a $3Bil expansion on their Manassas plant.

[thorhammerz]

3 minutes ago, Drak3 said:

That'd be pretty fucking stupid of them, seeing as Micron's doing a $3Bil expansion on their Manassas plant.

Yep.

For a whopping 5% more production (and the facility will be split producing both SSD NAND and DRAM chips).

[Blademaster91]

3 minutes ago, Wh0_Am_1 said:

It sounds to me that Samsung and SK Hynix are just doing their due diligence to balance supply and demand, why make more of it when it's unprofitable, otherwise they would have to do something awkward like what Nvidia with the 20 series due to oversupply with the 10 series, which resulted from Nvidia ramping up production of the 10 series in response to the global GPU shortage.

By trying to price fix with another false shortage? Not due diligence at all, I dunno about SK Hynix but Samsung could simply cut prices and still make a profit.

 

[Wh0_Am_1]

Just now, Blademaster91 said:

By trying to price fix with another false shortage? Not due diligence at all, I dunno about SK Hynix but Samsung could simply cut prices and still make a profit.

 

It's not price fixing, do people even know the definition of that term anymore? 

[Brooksie359]

2 minutes ago, Wh0_Am_1 said:

It's not price fixing, do people even know the definition of that term anymore? 

Do you know the definition? Because if Samsung and hynix are in an agreement to limit supply to keep prices the way they are now then that would be the definition of price fixing......

[Wh0_Am_1]

5 minutes ago, yian88 said:

indeed SSD prices have gone down heavily and now they try price fixing yet again....

If you look at the quote up their it states that "The silicon giants are facing a slump in customer demand" if their is reduced demand, then that would mean that the prices would drop to unprofitable prices, OR they would need to extend to the life of the product unnaturally, slowing down progress. Basically they are balancing supply and demand, they are not making an agreement to arbitrarily raise the prices of their products, no, that would be stupid right now, and also difficult to pull off. Because do note

Quote

The silicon giants are facing a slump in customer demand

 So why should they make more only to sell at an unsustainable price? 

[dizmo]

This isn't price fixing, this is matching supply to demand. You don't make 1,000 Big Mac's if only 100 people want them, and then lower the price so that people buy them simply because they're so cheap. That doesn't make good business sense at all, and it's rather shameful that you'd accuse them of that.

Maybe if you understand how corporations work...

 

@Wh0_Am_1 A valiant effort, but I'd honestly save your breath. You won't get through or convince them that they're wrong. They're mostly children that only want lower prices, and don't understand how a business functions.

[Wh0_Am_1]

12 minutes ago, Brooksie359 said:

Do you know the definition? Because if Samsung and hynix are in an agreement to limit supply to keep prices the way they are now then that would be the definition of price fixing......

Price fixing is an occurrence in which two or more companies arbitrarily agree to increase the prices of their products to make a quick buck, this such phenomena tend to be rare in capitalist markets due to the significant risk of the included companies breaking the agreement and stealing the others market share, and third parties  selling their products at reasonable prices thereby stealing the other companies marketshare, price fixing is almost always a foolish idea in capitalist markets due to the damage that occurs to the involved parties reputations, and the loss of marketshare, it is almost always a tactic that only works in the short term but usually causes irreparable damage in the long term.

[S w a t s o n]

>RAM prices inflated
>because of fab fire and general DRAM undersupply

 

>fabs now cutting expansion
>NAND/DRAM oversupply but RAM is still pretty expense

u fuckin wot m8?

 

this is not matching demand to supply this is artificially manipulating the market to maintain margins

[yian88]

7 minutes ago, Wh0_Am_1 said:

If you look at the quote up their it states that "The silicon giants are facing a slump in customer demand" if their is reduced demand, then that would mean that the prices would drop to unprofitable prices, OR they would need to extend to the life of the product unnaturally, slowing down progress. Basically they are balancing supply and demand, they are not making an agreement to arbitrarily raise the prices of their products, no, that would be stupid right now, and also difficult to pull off. Because do note

 So why should they make more only to sell at an unsustainable price? 

well no,  ddr4 / gddr6 is and will continue to be in high demand same for flash due to high rom capacity phones, only  ssd are not that much in demand

[Trik'Stari]

15 minutes ago, Wh0_Am_1 said:

If you look at the quote up their it states that "The silicon giants are facing a slump in customer demand" if their is reduced demand, then that would mean that the prices would drop to unprofitable prices, OR they would need to extend to the life of the product unnaturally, slowing down progress. Basically they are balancing supply and demand, they are not making an agreement to arbitrarily raise the prices of their products, no, that would be stupid right now, and also difficult to pull off. Because do note

 So why should they make more only to sell at an unsustainable price? 

Makin a loooot of assumptions here bud.

 

Unprofitable, or "unacceptable levels of profit". Like, actually making less than they spend on manufacturing, or just not making $5.00 for every $1.00 spent? That'd be the real thing to look at.

 

Remember that shareholders always want all of the moneys all of the time, and if they can't have all of the moneys all of the time, that's not good enough and we might as well not be in business.

[S w a t s o n]

38 minutes ago, Wh0_Am_1 said:

Price fixing is an occurrence in which two or more companies arbitrarily agree to increase the prices of their products to make a quick buck, this such phenomena tend to be rare in capitalist markets due to the significant risk of the included companies breaking the agreement and stealing the others market share, and third parties  selling their products at reasonable prices thereby stealing the other companies marketshare, price fixing is almost always a foolish idea in capitalist markets due to the damage that occurs to the involved parties reputations, and the loss of marketshare, it is almost always a tactic that only works in the short term but usually causes irreparable damage in the long term.

I would like to point out that DRAM price fixing has happened and been proven in court before (more than once in the US alone) and is currently being investigated again by China because it looked pretty bad that both Micron and SK Hynix released reports detailing they were focusing on maxing profit per unit rather than increasing production. (Not related to OP, this happened months ago)

[TetraSky]

If there's a "slump" due to "oversupply" from a lack of "demand", how come prices are still over what they were before they started screwing us all ?

[Misanthrope]

So they're one email somewhere from being confirmed fucking price fixing?

 

Sure nobody is obligated to "expand" but I guarantee that seeing the success of price fixing for similar areas they will just do the same.

 

We need some of them free market fairies to work their magic here guys....guys?

[Drak3]

1 minute ago, Misanthrope said:

So they're one email somewhere from being confirmed fucking price fixing?

Not really.

 

1 minute ago, Misanthrope said:

We need some of them free market fairies to work their magic here guys....guys?

They are. Demand has fallen, supply has risen. Samsung and SK are correcting themselves before there's so much supply that they're losing money hand over fist.

 

41 minutes ago, TetraSky said:

If there's a "slump" due to "oversupply" from a lack of "demand", how come prices are still over what they were before they started screwing us all ?

Retailers charging out the ass. Mostly big ones.

[Trik'Stari]

1 hour ago, S w a t s o n said:

I would like to point out that DRAM price fixing has happened and been proven in court before (more than once in the US alone) and is currently being investigated again by China because it looked pretty bad that both Micron and SK Hynix released reports detailing they were focusing on maxing profit per unit rather than increasing production. (Not related to OP, this happened months ago)

I have to say, I'm glad I bought my 32gb of memory when I did, right before the insane price hikes.

 

Really lucked out on that one.

[rawrdaysgoby]

Price hike again boys 

[Rune]

I remember buying my 16gb 3000 vengeance kit for 79.99.

What the fuck does oversupply look like to them? Three units left on the shelf?

[YoloSwag]

Anyone else hate it when people bring up the "Supply vs Demand" argument?

 

Obviously either can be manipulated to simulate the need to increase/decrease the other which should invalidate arguments saying it was a necessary adjustment to something that was schemed.

 

World inflation has not gone up significantly since primary needs prices are still close to what it was at least two years ago and suddenly companies that sell electronics and gadgets have the audacity to somehow increase prices and blame it on supply-demand and advancement in technology because people are gullible and will pay for anything.

[handymanshandle]

As long as this doesn't mean they're cutting production, we're good.

[bbbbbbb99]

5 hours ago, dizmo said:

This isn't price fixing, this is matching supply to demand. You don't make 1,000 Big Mac's if only 100 people want them, and then lower the price so that people buy them simply because they're so cheap. That doesn't make good business sense at all, and it's rather shameful that you'd accuse them of that.

Maybe if you understand how corporations work...

 

@Wh0_Am_1 A valiant effort, but I'd honestly save your breath. You won't get through or convince them that they're wrong. They're mostly children that only want lower prices, and don't understand how a business functions.

Theres a slump in demand for nand so why is dram getting affected? If its anything but pricefixing

[Misanthrope]

3 hours ago, Drak3 said:

They are. Demand has fallen, supply has risen. Samsung and SK are correcting themselves before there's so much supply that they're losing money hand over fist.

Did you not understand that the point of this plan is to stay ahead of the "natural market forces" in order to manipulate them?