According to institutional investigations, due to the Xi'an epidemic, Samsung's factory in Xi'an will adjust NAND flash memory production manpower and capacity utilization.
It is understood that among the major blockade caused by the epidemic, the personnel scheduling problem has the greatest impact on Samsung. In an environment of travel restrictions and other lockdown measures, Samsung’s Xi’an plant can only operate with minimal manpower. In order to reduce the impact on production, the factory can only make "active adjustments."
The current positive signal is that the factory must have sufficient energy supply for the production of water and electricity, and the power supply problems that were previously worried by the outside world have not occurred. And according to the report, the local government stated that "production can return to normal within one to two weeks at the earliest." But pessimistic predictions also indicate that if the epidemic is not properly controlled, it will still affect the production of local factories in the short term. At present, Samsung is still evaluating the possibility of potential impact, and has not been able to give an exact explanation.
Fortunately, the Xi'an plant did not stop production, but reduced the frequency and scale of operations. Samsung's two main NAND Flash fabs in Xi'an are still manufacturing without any major interruptions. The current operational adjustments in the Xi'an plant may affect the purchase orders of some smart phone and notebook manufacturers. Because from the perspective of terminal output, the Xi’an plant is mainly responsible for the assembly of consumer electronic products such as UFS and client SSDs. However, because the inventory level of these products is still relatively high, short-term supply is still not a problem, but a price drop should be unlikely to occur.
The agency quoted the NAND flash spot market data on December 29 as saying that after Samsung issued a statement on the Xi’an plant on the 28th, most of the current NAND flash memory suppliers for related products have stopped quoting, but the flash memory market changes in the first quarter of 2022 It's harder to say.
However, at the beginning of the 2022 New Year, news of price increases came out. Samsung is said to be considering increasing the price of its own-brand SSD products in the first quarter of 2022. In the case of sluggish terminal demand, some brand suppliers are reducing prices by less than 10% to attract more orders, leading to the same industry The prices of the products have been upside down.
DigiTimes quoted industry sources as saying that Samsung is considering increasing the price of its own-brand solid-state drives. The source did not disclose how much the price will increase, but the source pointed out that compared with other SSD suppliers, Samsung seems to be moving in the opposite strategy. In contrast, in the context of lower-than-expected demand, Samsung’s competitors are expected to cut prices by an average of 10% to increase the attractiveness of their products.
As the largest NAND chip manufacturer and price and output controller, Samsung has established a firm foothold in the SSD market. Therefore, in the first quarter of 2022, Samsung has adopted the opposite direction of most industry strategies, and the intention behind it seems elusive. However, according to sources, Samsung has recently had to cut the production plans of its two factories in Xi'an due to the outbreak, which may be one of the relevant factors. It is reported that Samsung’s Xi’an plant accounts for approximately 40% of Samsung’s NAND output and 7% of the total global output.
Although the major semiconductor companies have not yet given the final sales performance in 2021, industry organizations predict that Samsung's semiconductor sales in 2021 will be close to 83.1 billion U.S. dollars, making it the world's largest semiconductor supplier in 2021.
Driven by the recovery of the memory market and the relatively flat sales of Intel, Samsung has once again replaced Intel as the leading semiconductor manufacturer starting in the second quarter of 2021. As the DRAM market and the NAND flash memory market show strong growth in 2021, Samsung is expected to increase its sales by 34% in 2021/2020, and will lead the second-ranked Intel by $7.5 billion this year.
