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S. Korean DRAM suppliers to cut capital expenditure in 2020: report

All News 09:59 August 20, 2020

SEOUL, Aug. 20 (Yonhap) -- South Korea's major chipmakers are expected to cut their DRAM capital spending this year, a report showed Thursday, as they become cautious over market conditions amid the pandemic.

Samsung Electronics Co.'s DRAM capital expenditure budget is projected to decline 21 percent to US$4.9 billion this year, according to market researcher IC Insights, while its domestic rival SK hynix Inc. is expected to cut its DRAM capital spending 38 percent to $4 billion.

Samsung and SK hynix are the two biggest DRAM suppliers in the world. According to industry tracker TrendForce, Samsung's DRAM market share stood at 43.5 percent in the second quarter of the year, while that of SK hynix reached 30.1 percent.

This photo provided by SK hynix Inc. on July 2, 2020, shows the company's high-speed DRAM, HBM2E. (PHOTO NOT FOR SALE) (Yonhap)

The industry's No. 3 player Micron Technology Inc. of the United States was expected to trim its DRAM capital expenditure by 16 percent this year to $3.6 billion.

"The DRAM market is poised for a modest recovery in 2020, but suppliers are being very cautious, strategic and thorough in their analysis of market conditions before they consider any further upgrades or decide to move ahead with any new DRAM wafer fab plans," IC Insights said.

Overall, the global DRAM makers are forecast to allocate $15.2 billion to DRAM capital expenditure this year, down 20 percent from a year earlier, according to IC Insights.

"DRAM makers will continue to closely monitor capacity and expansion plans in the coming months in order to limit potential damage from another supply-demand imbalance," it said.


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