Samsung Shifts Memory Production Strategy Amid Soaring DRAM Demand
Samsung is set to make significant changes to its memory manufacturing operations in response to the rapidly increasing demand for DRAM, fueled by the global expansion of AI infrastructure. Recent reports from the Korean semiconductor industry, as highlighted by SE Daily, indicate that Samsung will convert portions of its NAND flash production lines in Pyeongtaek and Hwaseong to focus on DRAM manufacturing. Additionally, the company’s upcoming Pyeongtaek Fab 4 (P4) facility will operate exclusively as a DRAM production line, utilizing Samsung’s advanced 1c process technology.
Rising DRAM Prices and Anticipated Shortages
Industry insiders report that Samsung is taking a more cautious approach to the NAND flash market, as demand for standard DRAM modules has surged. The price of DRAM has risen sharply, with some server customers reportedly offering up to 70% more for high-capacity 96 GB and 128 GB DDR5 modules, yet still facing supply shortages. Major technology companies are anticipating ongoing DRAM shortages for several years and have already begun negotiating supply allocations as far ahead as 2027.
Production Line Reconfiguration and Capacity Expansion
Currently, Samsung manufactures both DRAM and NAND flash memory at its Pyeongtaek Fab 1, Pyeongtaek Fab 3, and Hwaseong facilities. The company plans to further shift the hybrid production lines at P1 and Hwaseong toward DRAM by removing NAND-specific equipment. The new Fab 4, which is nearing completion, is scheduled to begin operations next year as a dedicated 1c DRAM line. Samsung is also evaluating the possibility of converting a second zone of Fab 4—originally intended for foundry production—to DRAM manufacturing.
Once these changes are implemented, Samsung’s DRAM output from Pyeongtaek Fab 1 (Hwaseong) and Fab 4 (P4) is expected to increase substantially in the first half of the coming year. To balance the reduction in Korean NAND flash production, Samsung plans to boost output at its Xi’an plant in China, ensuring continued supply for global customers.
Implications for the Global Memory Market
Samsung’s strategic shift underscores the growing importance of DRAM in supporting AI-driven data centers and enterprise applications. As demand for high-capacity memory modules continues to outpace supply, the company’s reallocation of manufacturing resources is poised to play a critical role in stabilizing the DRAM market and meeting the needs of major technology firms worldwide.
