Samsung Reworks Memory Strategy as DRAM Prices Boom, Scales Back HBM

Samsung is adopting a new strategy in its memory business to focus on higher profits. The company aims to take advantage of increasing DRAM prices while scaling back its High Bandwidth Memory (HBM) efforts. It may expand general-purpose DRAM production for greater profitability in the coming years.

Samsung shifts its focus to DRAM for higher profitability

The move comes as the prices of DRAM products such as DDR5, LPDDR5X, and GDDR7 increase. The contract price for Samsung’s 32GB DDR5 memory module reportedly jumped 60% (from $149 in September to $239 in November). As such, Samsung sees an opportunity to boost profits by focusing on these products.

According to a report from DealSite, Samsung plans to expand production of its 10nm-class, fifth-generation (1b) DRAM. The company may convert older production lines, such as 1z, while allocating a substantial portion of capacity to DRAM. Furthermore, it may convert some NAND flash production capacity for the same purpose.

Meanwhile, Samsung’s HBM business remains unprofitable due to sluggish orders. While the company hopes to gain a foothold in this space with HBM4, the current yield of this next-gen chip raises questions about its profitability. Furthermore, the firm has yet to finalize a supply agreement with Nvidia for HBM4. As a result, it is maintaining the HBM production target for next year while expanding DRAM production.

“Our top priority next year is to maximize profitability at all costs,” said a Samsung official. We’ve been lagging behind SK Hynix’s technological prowess, but we’re not yet competitive enough to quickly overtake them with HBM.”

As part of the new strategy, a leadership change in the memory division is also underway. Han Jin-man is being considered as the next head of the Memory Business Division. Han worked as Vice President of the Memory Business Division’s Strategic Marketing Office in 2020. Known for his price negotiation skills, Han could help maximize profits from the booming DRAM market.