After the memory market, led by DRAM, began to rebound, NAND Flash has also entered the final stages of its downturn. Customer inventories have been consumed, and with the growth in demand driven by Artificial Intelligence (AI), it's reported that Samsung Electronics' NAND utilization rate has increased to nearly 90%.
According to industry sources cited by South Korean media ET News, the average utilization rate of Samsung's NAND factories has reached close to 90%. Previously, Samsung had implemented NAND production reduction plans due to semiconductor downturns, with utilization rates falling to as low as 60%. However, since the end of 2023, signs of recovery have emerged, and after the utilization rate exceeded 80% in the first quarter of 2024, it has continued to grow.
Industry insiders point out that some major factories have reached full capacity. It is reported that Samsung has significantly increased the utilization rate of its Xi'an factory in China, gradually expanding NAND production at its Pyeongtaek factory in South Korea. The Xi'an factory is one of Samsung's core NAND production bases, accounting for 30-40% of its total NAND output.
Samsung's semiconductor business experienced a memory downturn in 2023. While the DRAM business benefited from the recovery of High-Bandwidth Memory (HBM) and other high-value-added products, the NAND business struggled to achieve a supply-demand balance, affecting overall performance. Since Samsung began reducing production in the first quarter of 2023, the inventories of major NAND customers have now been largely depleted, and demand is gradually stabilizing.
Furthermore, amid the AI boom, major players are expanding server investments, leading to increased demand for NAND storage devices for inference data. Cloud service providers in North America and China are actively securing enterprise Solid-State Drive (SSD) inventories, providing Samsung with more opportunities to expand NAND production.
Against this backdrop, several South Korean media outlets recently reported that Samsung plans to raise NAND prices by about 20% and is currently negotiating with customers. Samsung is expected to release its first-quarter 2024 financial results on April 30, and the expected recovery of the overall NAND market is anticipated to be reflected in its performance.
