Storage chip "super cycle" accelerates: Samsung and SK Hynix both raise prices by 30%, some customers lock in long-term contracts for 2-3 years

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The memory “supercycle” triggered by artificial intelligence is accelerating across the board, forcing major global suppliers to significantly raise prices and driving customers to scramble to lock in long-term supplies to cope with the escalating risk of shortages.

According to media reports on the 23rd, Samsung Electronics and SK Hynix have raised the prices of their DRAM and NAND flash memory by up to 30% in the fourth quarter, and have passed on the new pricing system to customers. This move is a direct response by memory giants to the current imbalance between supply and demand in the market, and the price hike cycle has officially begun.

As concerns over supply shortages intensify, major customers are taking unprecedented actions. It is reported that some American electronics companies and data center operators are negotiating medium- to long-term supply contracts lasting 2 to 3 years with Samsung and SK Hynix.

The market generally expects that this AI-driven shortage will be longer and stronger than any previous boom cycle. Reports quote analysts as saying that the shortage could last three to four years. Behind this forecast are multiple factors, including trillions of Korean won invested in new AI servers, continuous memory upgrades for general-purpose servers, and the rising demand for edge AI devices.

HBM Squeezing Capacity Further Tightens Supply

Amid expectations of continued tight supply, the procurement model in the memory market is undergoing structural change.

Traditionally, businesses preferred to sign quarterly or annual DRAM contracts to maintain inventory management flexibility. However, with forecasts indicating that general-purpose DRAM will remain in short supply, companies are increasingly turning to locking in extra supply ahead of time. American electronics giants and data center operators have already begun exploring 2- to 3-year medium- to long-term agreements with South Korea’s leading memory manufacturers to ensure the stability of their supply chains for the next few years.

Part of the reason for the rising DRAM prices is that its capacity is being squeezed by high bandwidth memory (HBM). According to a report quoting Micron’s chief business officer Sumit Sadhana, the wafer capacity consumed by HBM is more than three times that of standard DRAM. Because of high profitability, memory manufacturers have strong incentive to prioritize HBM production. Analysts expect that next year’s 12-layer HBM4 products will have a unit price of $500 each, more than 60% higher than the current 12-layer HBM3e priced at around $300.

AI Boom Drives All-Round Demand

This round of the memory supercycle is being driven not just by HBM, but by comprehensive demand growth. Analysts believe the strength and duration of this cycle will surpass previous ones. Drivers include massive new investments by enterprises in AI servers, memory upgrades to general servers to support AI applications, and the popularization of “edge AI” functions on devices such as smartphones and PCs.

In addition, as AI investment focus shifts from large-scale data training to inference applications, demand for general-purpose DRAM is rising simultaneously, since general DRAM has advantages in processing speed and power consumption, further intensifying the supply shortage throughout the DRAM market.

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