Samsung and SK Hynix substantially increased their DRAM output by improving their factory yields in 2014 leading to oversupply in the market. Most of the largest DRAM manufacturers in Asia have been unwilling to cut their DRAM supplies, pretty much like the situation in the oil market. Most manufacturers have been willing to sacrifice their margins in a bid to gain market share.

But relief could finally be on the way, with Samsung's comments during its latest earnings call suggesting it could pare back DRAM supply. This sentiment seems to be supported by SK Hynix's recent projections that industry DRAM supply would fall during the second half of the year which would help the company's DRAM shipments to grow in the mid-teens Q/Q. Specifically, SK Hynix said it expects:

"more positive demand momentum around the second half as inventory levels for major customers is not too high today and demand from new smartphone launch toward the end of the quarter is expected to stimulate mobile DRAM demand with adoption of higher-density DRAM to continue, and launch of new server chipsets is expected to drive system buildup demand for servers."

SK Hynix added that the NAND outlook remains good with NAND supply/demand remaining more balanced than expected earlier.

By: DocMemory
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