By Kate Yuan

(JW Insights) Apr 21 -- Samsung Electronics has started cutting NAND flash production with a 5% aim, centering on its memory semiconductor plant in Xi’an of northeastern China’s Shaanxi Province, BusinessKorea reported on April 20.

In particular, during the second quarter, the Korean semiconductor giant made a big production cut at the Xi’an semiconductor plant, which is the chipmaker’s only memory production base. The Xi’an plant accounts for about 40% of Samsung Electronics’ total NAND production. It mainly produces 128-layer (V6) NAND flash memory.

Samsung Electronics announced a production cut in memory semiconductors on April 7. The company explained, “We focused on an advanced process with high technical difficulties and a conversion to DDR5 and LPDDR5 DRAM.” “We are adjusting memory production to a meaningful level.” Industry insiders analyzed that the production cut will happen in DRAM, which has shown high profitability.

However, industry observers believe that Samsung Electronics, which has a very high share (more than 30 percent) of the global NAND flash market and unrivaled cost competitiveness, chose to cut NAND flash production because the current memory market situation is bleak, said the BusinessKorea report.