Since 2014, Samsung Electronics has been building its production site in the Chinese city of Xi’an and currently provides up to 40% of the production volume of 3D NAND memory chips of this brand, but only in the 128-layer design. Samsung will be able to relax US export controls next year found in China the release of more modern 236-layer microcircuits.
Before that, the company must deliver the technological equipment necessary for the production of such a memory to the plant in Xi’an by the end of this year and, in this regard, lift export restrictions from the United States for an indefinite period. This relaxation came in very handy, although the company already has seen similar easing since October last year, although mostly only within a 12-month period. Now there is more clarity in the policy of the US authorities and Samsung can start a program to modernize its Chinese production site, which is the largest in the world in the production of 3D NAND memory.
The release of 128-layer memory will no longer be so profitable in the future, and Samsung can now use the surplus of chips of this generation that has appeared on the market to modernize its business in China without affecting supply volumes. In addition, the transition from production of sixth generation memory (128 layers) to eighth generation (236 layers) reduces business productivity by approximately 30% due to the longer production cycle time. In any case, Samsung’s Chinese factory is currently still running at about 20% of its rated capacity due to memory overproduction.
The transition to a more modern 236-layer memory will ultimately allow Samsung to reduce production costs and maintain the company’s competitiveness on a global scale. The company is the largest memory manufacturer in the world; it is important that it modernizes its facilities in a timely manner to maintain this status, and current US export control regulations do not prevent it from doing so.