Following the memory price surge, Samsung made significant profits last year, with its revenue hitting a new high. However, this success came with growing challenges.
According to the Securities Times, the global memory market is dominated by three major players—Samsung, Hynix, and Micron—who together hold over 90% of the market share. In the first half of this year, memory prices remained stable, but concerns about future volatility are growing.
The recent rise in exchange rates, along with increasing costs for raw materials and labor, has led to higher production expenses. This has pushed some of the world's largest chip manufacturers to raise their prices, signaling a potential trend of continued price increases in the memory sector. As a result, domestic manufacturers are facing rising cost pressures, which could impact their competitiveness.
The report also highlights that the National Development and Reform Commission (NDRC) is closely monitoring Samsung due to the current oligopoly in the memory market. With limited bargaining power, downstream manufacturers are at the mercy of the big three, raising concerns about monopolistic behavior. The NDRC believes it's necessary to keep an eye on these companies to ensure fair competition.
According to sources speaking to the Securities Times, Samsung controls more than 40% of global memory production capacity. This has raised suspicions that the company may be manipulating supply levels. If Samsung claims a shortage, it’s hard to tell if it’s genuine or just a strategy to drive up prices. By slowing down production growth, they can maintain high prices and maximize profits. This concentrated power among the top three firms has sparked serious regulatory concerns.
Wang Yanhui, Secretary General of the China Mobile Alliance, said it's too early to predict what actions the NDRC might take next. However, if Samsung is found to be involved in price manipulation, the commission could impose penalties similar to those seen in other countries. This shows that regulatory scrutiny is intensifying as the market becomes more consolidated.
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