Samsung Reportedly Aims to Restore Normal NAND Inventory Levels by Year's End

According to Korean media citing sources within the industry, Samsung has devised a production strategy with the goal of achieving a normalized NAND inventory by the conclusion of this year, which amounts to 6-8 weeks. Earlier this year, Samsung's stock of NAND inventory had surpassed 20 weeks, reaching an apex of 28 weeks, but it has more recently receded to 18 weeks. Reports reveal that Samsung's wafer input for the latter half of the year will witness a decrease of 10% compared to the initial six months. The primary focal point of the company's curtailed production efforts is the 128-layer 6th generation V-NAND (V6), which currently boasts a substantial inventory.

The endeavor to normalize NAND inventory stands as a paramount objective for Samsung, a key player in the storage industry.

Days of Inventory refers to the interval between the completion of semiconductor production and shipment. This metric serves as an indicator of the present inventory level and the projected depletion timeframe.

In a bid to shrink inventory, Samsung Electronics is actively planning production cutbacks. The reports highlight that the latter half of the year will witness a 10% reduction in Samsung's wafer input compared to the initial half. Presently, the company's principal target for production downsizing is the 128-layer 6th generation V-NAND (V6), characterized by its substantial inventory.

The semiconductor manufacturing process hinges on silicon wafers, and thus, reducing wafer input equates to reduced production. Unlike "technical production delays" which extend shipping timelines through prolonged production periods, a reduction in wafer input directly leads to a decline in semiconductor supply and shipment. As such, it serves as a swift mechanism for equilibrium between supply and demand.

Additionally, there has been a noticeable decrease in the utilization rates of NAND flash memory fabs. While distinctions exist between state-of-the-art products and generic ones, the utilization rates have exhibited a notable dip. Particularly, the Xi'an factory in China is speculated to be operating at less than 50% capacity.

A representative from Samsung Electronics remarked, "We are adeptly tailoring the production of storage semiconductors in alignment with customer requirements. As of now, we are unable to confirm the precise extent of production reduction or operational rates."

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