SEOUL-- Samsung Electronics Co. is expected to expand its production capacity for dynamic random-access memory (DRAM) chips next year in a bid to keep its dominance in the market, an industry tracker said Thursday.
"There are reports that Samsung is considering expanding its production capacity to increase competition and raise the barrier for market entry. Thus, there is a possibility that the tight supply for DRAM may end sooner than originally anticipated," DRAMeXchange said.
Global chipmakers, including Samsung and its smaller local rival SK hynix Inc., have been enjoying robust performances over recent quarters as the chip supply failed to catch up to soaring industrywide demand, which eventually led to a hike in prices.
DRAMeXchange said while Samsung's expansion of production will lead to a falling profitability for the DRAM business in the short term, it will eventually help the company solidify its market dominance.
"Samsung's ultimate goal is to ensure its long-term dominance in the market in terms of having an enormous production capacity and being ahead of its competitors' technologies by one to two years," it said.
The industry tracker added the move also comes as its rivals SK hynix and Micron Technology Inc. also benefited from the boom and raised enough cash to roll out their own investment plans.
In addition, DRAMeXchange said Samsung could also engage in "aggressive pricing" through its expanded production to compete with Chinese chipmakers, which have been making major steps to catch up to big players.
Source: Yonhap News Agency