To overcome the sluggish memory market conditions, Samsung Electronics is planning to halt some of the NAND Flash production equipment at its P1 facility in Pyeongtaek, South Korea, which produces older generation NAND Flash production. The equipment outage is expected to last at least one month and as long as the second half of this year.

The P1 NAND production line of Samsung Electronics is primarily dedicated to the production of V6 NAND, which represents the sixth generation of NAND with 128 stacked cells for data storage. Currently, Samsung Electronics is focusing on the production of 176-layer V7 and 236-layer V8 NAND flash memory. Among them, V8 NAND is the latest product that Samsung Electronics started mass-producing at the end of last year. 

Samsung Electronics' Pyeongtaek complex in South Korea

Semiconductor factories typically adopt a "non-operation" method when reducing product output, in which equipment is operated without loading wafers. This is because restarting the entire production line from scratch to reproduce the same yield would require additional time and cost.

However, some analysts suggest that Samsung Electronics' move to halt the operation of certain equipment is aimed to achieve a double benefit by intensifying production cuts centered on the old generation products with sluggish demand, while significantly reducing costs."

In fact, during the Q2 earnings conference call earlier this year, Samsung Electronics had already announced that "in the second half of this year, we will significantly reduce the production of NAND flash memory."

It has been reported that Samsung Electronics is significantly reducing wafer inputs at its major NAND production bases, including Pyeongtaek and Hwaseong in South Korea, and Xi'an in China. Industry experts estimate that Samsung Electronics' NAND production reduction will be around 10%.