As reported by UDN News, Samsung Electronics is making a significant move by increasing the prices of NAND Flash memory by 20% every quarter until the second quarter of 2024. This price surge exceeds industry expectations.
Within the semiconductor industry, Samsung initially raised NAND wafer prices by 10% to 20% this quarter, Pulse reported. Now, the company has decided to continue this trend by progressively increasing prices by 20% during the first and second quarters of the next year. This strategic decision reflects Samsung’s determination to stabilize NAND wafer prices with the aim of reversing the market’s direction in the first half of the upcoming year.
Based on TrendForce’s research in October, with NAND wafer prices leading the increase since August and suppliers adopting a firmer stance in negotiations, Q4 enterprise SSD contract prices are projected to rise by approximately 5~10%. Meanwhile, reduced production of mainstream processes and fewer suppliers for high-end client SSDs have endowed suppliers with better bargaining power. Consequently, both high-end and low-end products are expected to increase concurrently, with 4Q23 PC client SSD contract prices projected to rise by 8~13%.
TrendForce also reports that Q4 contract prices for mobile DRAM are poised to see an increased quarterly rise of 13–18%. But that’s not all—NAND Flash is also joining the party, with contract prices of eMMC and UFS expected to climb by approximately 10–15% in the same quarter. This quarter is set to star mobile DRAM, traditionally the underperformer in profit margins compared to its DRAM counterparts, as it takes the lead in this round of price increases.
TrendForce foresees that memory prices are expected to continue trending upward in 1Q24. The rate of increase will depend on whether suppliers maintain a conservative production strategy and whether there is enough consumer demand to bolster the market.
Samsung’s Strategy on NAND Affect the Market and Company Performance
Following the latest financial report, NAND is a staple memory chip alongside DRAM, and together they account for around half of Samsung Electronics’ memory chip sales. In conjunction with the aggressive price hikes, Samsung is also curbing production to manage market supply effectively, promoting a positive market environment, and enhancing profitability.
At a recent financial conference on October 31st, Kim Jae-jun, Vice President of Samsung Eletronics, publicly stated, “There will be selective production adjustments to normalize inventories in a short time. A supply cut will be larger for NAND flash than for DRAM.”
Financial analysts estimate that as memory production cuts take effect and prices rise, Samsung’s operations will see a significant improvement starting from the fourth quarter of this year.
NAND Industry Foresee Bright Future amid Memory Price Surge
NAND-related businesses in Taiwan are also optimistic about the industry’s future. Khein Seng Pua, CEO of Phison Electronics Corp, indicated that the adjustment of OEM customer inventories, spanning the past six to nine months, is nearly complete. Consequently, Phison has secured more design-in projects, resulting in a gradual increase in wafer demand. Furthermore, Phison’s controller IC products have advanced into a new process generation, leading to a rise in value-added custom development projects.
Simon Chen, Chairman and CEO of ADATA, anticipates a prolonged period of rising memory prices, starting from the fourth quarter of this year and continuing into the first half of the next year. This is expected to create a two-year era of prosperity in the memory market, with supply shortages predicted in the coming years.
Industry experts highlight the reinvigoration of the NAND wafer market, with customers progressively returning. Samsung, being the global memory chip leader, is spearheading the price hikes, thereby contributing to a favorable pricing trend across the overall market.