This move will allow Samsung to squeeze more out of its aging DDR4 production line.
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RAM (Image credit: Shutterstock) Share Share by: Copy link Facebook X Whatsapp Reddit Flipboard Share this article Join the conversation Follow us Add us as a preferred source on Google Samsung has reportedly delayed the shutdown of its DDR4 production line, which it initially announced earlier this year . According to DigiTimes [machine translated], the South Korean chipmaker is doing this as 16GB DDR4 modules hit a record of $60 in the spot market. This pricing made the DDR4 market lucrative enough for Samsung to delay the shutdown of its existing DDR4 production line. However, it will not set up new ones to accommodate increasing consumer demand. In line with this, reports indicate that one customer has already signed an “NCNR contract” with the company to secure its DDR4 supply.
NCNR (non-cancellable, non-returnable) contracts mean a client will receive a fixed number of memory modules at a fixed price, and that the price or volume cannot be modified in the future. In other words, the customer is contractually obliged to buy the product regardless of any other factors.
This type of agreement ensures stability in both volume and cost for the customer so that they won’t be affected by the current volatility in the memory market driven by the AI rush. On the other hand, this helps Samsung insulate itself from uncertainty in the memory market. Even if the AI bubble bursts and there is an oversupply of HBM and DDR5 memory modules, causing their prices to drop, this ensures that its DDR4 production line remains profitable.
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Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/pc-components/ddr4/SPONSORED_LINK_URL
- https://www.tomshardware.com/pc-components/ddr4/samsung-to-delay-its-planned-ddr4-end-of-life-due-to-signing-a-long-term-non-cancellable-non-returnable-contract-with-key-customer-agreement-will-not-alleviate-consumer-shortage-supply-earmarked-for-server-clients#main
- https://www.tomshardware.com
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