Samsung Electronics is shifting more of its production for traditional memory modules, including DDR5 and SSDs, to external manufacturing partners. This move allows Samsung to free up internal factory space for the production of more advanced memory technologies, such as High Bandwidth Memory (HBM), which is used in high-performance computing and graphics processing. Industry insiders suggest that the decision is driven by the need to optimize the use of limited back-end manufacturing capacity, which is crucial for assembling and testing memory products. Samsung is focusing its in-house resources on the complex packaging process required for HBM, which enables faster data transfer rates and is in high demand for cutting-edge applications like AI and data centers. To support this shift, the company has asked its outsourced partners—such as Dreamtech, Hanyang Digitech, and SFA Semicon—to expand their capacity for DDR5 and SSD production. Some of these expansions were already planned, but Samsung has accelerated the timelines to meet growing demand. Dreamtech, for example, started mass production of DDR5 modules in India in November 2023 and has since approved additional investments to increase capacity. The company's facility in Noida, India, which was previously used for assembling smartphone circuit boards, is expected to eventually produce over 50 million units annually. In Vietnam, Hanyang Digitech has invested over 31.5 billion won in 2026 to automate its existing memory module plant. Meanwhile, SFA Semicon is moving DDR5 testing and assembly equipment from Samsung's Onyang campus to a new site in the Philippines, with the transition starting in November and a second phase planned for early 2027. Samsung’s own capacity limitations are partly due to the construction of a new HBM plant at its Onyang campus, which is valued at 6 trillion won. This facility will take several years to complete, making it difficult for Samsung to expand traditional memory production in the short term. Additionally, a separate $1.5 billion back-end processing plant is being built in northern Vietnam to handle testing for older memory types, such as DDR4 and NAND flash. While DDR5 production can be outsourced relatively easily due to its simpler manufacturing process, HBM requires more advanced packaging techniques that are currently best handled in-house. Companies like Micron have followed a similar strategy, focusing internal resources on higher-margin products while outsourcing conventional memory production. Whether SanDisk will adopt a similar approach depends on its unique manufacturing capabilities and product lineup.