Chinese Chipmakers Shake Up Global Market with Aggressive Pricing Strategies

December 9th 2024

Credit: koreaherald.com

In Summary:

Chinese memory chipmakers are disrupting the global market, undercutting competitors like Samsung Electronics and SK hynix by flooding the market with low-cost legacy DRAM chips. This aggressive pricing has caused DRAM prices to plunge by over 35% since July, forcing analysts to lower profit forecasts for South Korean chip giants.

From the perspective of Chinese chipmakers, this strategy allows them to gain market share in a highly competitive industry while leveraging exemptions from US trade restrictions on advanced chip equipment. However, critics argue that these practices exacerbate global market volatility, with South Korean and US manufacturers facing declining profits and overcapacity issues.

The situation reflects larger geopolitical and economic dynamics as China seeks to assert dominance in the semiconductor sector, while South Korea and the US navigate the challenge of balancing market competition with protecting domestic industries.

For the full article, visit the original post on: koreaherald.com - Cheaper Chinese chips hamper profit outlook for Samsung, SK hynix