[News] Samsung NAND Flash Prices Reportedly Set to Increase by 20%

2024-03-15 Semiconductors editor

According to a report by the South Korean news outlet The Chosun Daily, Samsung Electronics’ memory business has managed to endure the market downturn from last year. Recently, its strategy of reducing production has finally paid off, driving up chip prices.

Reports suggest that in the first quarter of this year, Samsung plans to raise NAND Flash chip prices by up to 20%, aiming to restore profitability to its memory chip business.

The report quotes a semiconductor industry source as saying, “The first-quarter price negotiations between major memory manufacturers such as Samsung Electronics and SK Hynix and their customers have not yet been concluded. However, customers are rushing to secure supplies as the price of NAND flash has been steadily increasing, and fears spread that NAND flash cuts will continue this year.”

As per the report citing sources, Samsung Electronics will renegotiate prices with major mobile, PC, and server customers in March and April this year. It is expected to push for a price increase of 15 to 20%.

As per a report from Commercial Times, the global economic downturn last year led to an oversupply of memory and a sharp decline in prices, resulting in severe losses for Samsung and SK Hynix’s memory businesses. Samsung’s memory division experienced its first-ever losses last year, dragging down the company’s overall profits to a new low.

Samsung, Micron, and SK Hynix, the three major players in the memory industry, began significant production cuts in the second half of last year, finally causing DRAM chip prices to rebound. However, the NAND Flash chip market is crowded with many manufacturers, including not only the three major players but also Japanese Kioxia and American Western Digital, leading to less significant effects from the production cuts.

Last year, Samsung’s NAND Flash chip business incurred operating losses of KRW 11 trillion (approximately USD 8.3 billion), while SK Hynix’s NAND Flash chip business also faced operating losses of 8 trillion Korean won. Since the second half of last year, the aforementioned companies have halved their production capacities, finally pushing NAND Flash prices up.

Per TrendForce’s data, NAND flash prices have increased for five consecutive months. TrendForce research previously indicated that despite facing a traditional low-demand season, buyers are continuing to increase their purchases of NAND Flash products to establish safe inventory levels. In response, suppliers, aiming to minimize losses are pushing for higher prices, leading to an estimated 15–20% increase in NAND Flash contract prices in 1Q24.

Currently, the NAND Flash market is still dominated by the five major manufacturers, with Samsung and SK Hynix accounting for the lion’s share.

Samsung still firmly held the top position in the NAND Flash market, with its market share increasing from 31.4% in the previous quarter to 36.6%; next was SK Group, with its market share increasing from 20.2% in the previous quarter to 21.6%.

Following them were Western Digital, whose market share decreased from 16.9% in the previous quarter to 14.5%, Kioxia, whose market share decreased from 14.5% in the previous quarter to 12.6%, and Micron, whose market share decreased from 12.5% in the previous quarter to 9.9%.

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(Photo credit: Samsung)

Please note that this article cites information from The Chosun Daily and Commercial Times.