Although DRAM shortages are deepening on AI-driven memory demand, there are views that Samsung Electronics, the No. 1 player in the DRAM market, will fall short of market expectations for the pace of supply expansion in the second half. Analysts say the company is prioritizing a process shift from 10-nanometer fifth generation (1b) to 10-nanometer sixth generation (1c), putting more weight on stabilizing Production yield than on increasing volume.
According to data from market research firm Omdia obtained by ChosunBiz on the 24th, Samsung Electronics' DRAM production capacity is expected to increase about 6%, from 7,695,000 wafers annually last year to 8,175,000 wafers this year. Next year, total DRAM production capacity is projected to reach 8,280,000 wafers, with the growth rate falling to 1.3%. In particular, during the conversion of legacy DRAM tools to 1c DRAM to be mounted in sixth-generation HBM (high bandwidth memory, HBM4), there is a possibility of some production loss.
A Samsung Electronics Pyeongtaek Campus official said, "Although steady expansion investment is being made at the Pyeongtaek Campus, it looks difficult to sharply increase DRAM production capacity to match market demand with the lines currently in operation," and added, "The company's basic policy puts emphasis not on quantitative expansion but on the Production yield and productivity of state-of-the-art DRAM, which has been the basic philosophy consistently upheld by Vice Chairman Jun Young-hyun since last year."
In fact, the Pyeongtaek Campus is understood to be conducting process conversion investments by retrofitting existing lines. As some lines that had remained at mature nodes move to sixth-generation processes through retrofit (upgrading existing equipment), the share of the Pyeongtaek plant in Samsung Electronics' total DRAM production capacity is shown expanding from 49.5% in 2025 to 55.4% in 2027. However, because this increase comes from upgrading existing lines rather than completing new fabs, there are claims that the tangible pace of supply expansion could be slower than the headline figures suggest.
By contrast, the Hwaseong 16 and 17 lines have been flat to declining for three years. In the fourth quarter 2024 earnings conference call, Samsung Electronics said profitability of legacy (older) products had decreased amid intensifying competition in the global memory market and noted it would sharply reduce the share of legacy DRAM and NAND flash, which had accounted for 30% of existing DRAM sales. In fact, for the Hwaseong Line 12, the shift from mass production of conventional 2D NAND to an "end-fab" for the back-end (BEOL) processes of Hwaseong Line 15 was recently completed, and the industry says it is expected to contribute to increased DRAM shipments starting in the second half. The industry also sees the slowed growth in production capacity at Lines 16 and 17 as aligned with this legacy cleanup and repurposing trend.
Meanwhile, SK hynix is expected to maintain double-digit growth, increasing from 6,060,000 wafers in 2025 to 6,660,000 wafers in 2026, up 9.9%, and to 7,290,000 wafers in 2027, up 9.5%. Accordingly, the gap in DRAM production capacity between the two companies narrows about 39% in two years, from 1,635,000 wafers in 2025 (Samsung 27.0% advantage) to 990,000 wafers in 2027 (13.6% advantage).
Because Samsung Electronics lagged in the Production yield race for fifth-generation (1b) DRAM in the past, it has continued to prioritize stabilizing yields over boosting volume through new expansions. Since Vice Chairman Jun Young-hyun took office, the company is said to have reexamined processes and designs for all products and self-adjusted the pace of capacity operations to build stability starting with fifth-generation DRAM.
There are also views that the strategic choice by Samsung Electronics, the No. 1 player in the DRAM market, could instead become a burden during the second-half supply shortage phase. While SK hynix narrows the gap through expansions centered on new lines, Samsung Electronics has put the emphasis on quality over volume, which could leave it trailing in supply responsiveness.
However, some counter that supply capacity based on wafer input is not entirely identical to actual market responsiveness. The newer the DRAM process, the higher the bit density per identical wafer, which means that on a bit-converted basis there is some effect of offsetting the severe supply-demand imbalance in the first half. An industry official said, "Judging solely by wafer input, Samsung Electronics' expansion pace looks slow, but in terms of bit growth rate, which reflects actual supply capability, it is increasing," adding, "However, because DRAM shortages in the second half remain serious, the memory market boom is likely to last longer."