Samsung's DDR4 Memory Production Continues Amidst A High Corporate Requirement
Samsung is changing its previous decision to phase out the "legacy" DDR4 RAM; it will revive production because of a huge fill-up from corporate customers. This decision, however, will not affect consumer-grade DDR4 memory sales prices.
So Much for the Planned Phase-Out
Initially, the company planned to cut a huge portion of its DDR4 chip manufacturing in 2025 and concentrate on newer technologies like DDR5, and HBM memory. This, as Digitimes reports, made the corporate clients, who are afraid of a supply shortage on reasonably priced memory, secure many large-scale and long-term contracts for DDR4 chips.
This led to a surge in demand over the last six months that sent DDR4 prices somewhere even above DDR5. Thus, Samsung continues with this mature, high-yield, and profitable technology that has now appeared to be a decision financially advantageous.
Role of Non-Cancellable Contracts (NCNR)
Part of the renewed production aspect is actually these Non-Cancellable, Non-Returnable (NCNR) contracts, which are binding to have fixed prices as well as quantities of supplies by the buyer: basically a contract used as a hedge in a volatile market. This sort of models locks in Samsung to guaranteed revenue, while the client locks in a stable supply.
Industry sources indicate that these NCNR contracts are primarily being signed with customers in the server and automotive industries. The new production capacity for DDR4 will be mostly committed to those high-volume sectors.
Effects on the Consumer Market
Renewed manufacture will bring no consolation for consumers trying to find their way through the dense thicket of supplies for the home personal computer market. However, because almost all output will go to be sold out to corporate clients, analysts don't expect to see any drop in prices for consumer DDR4 modules. Furthermore, the ongoing general market trend of phasing out DDR4 toward new technologies remains irreversible over the long term.
More Economically, nerd-speakers expect the tight supply and extend pricing of this band. This decision of Samsung is profit-acquisition oriented to a specific market segment but not a return to the general public's DDR4.
Broader Production Strategy
This is in line with the other strategic adjustments made by Samsung such as the shifting of some high-bandwidth memory (HBM3E) capacity into the DDR5 production line. Maximizing profit is Samsung's priority in reallocating as much of its manufacturing capacity as possible to the most profitable and stable product lines. Samsung will maintain DDR4 production until at least the end of 2026, although not direct production but based on specific fields and existing contracts.
