Storage shortages are severe! Korean media: Samsung Electronics will raise NAND prices by 100% in the first quarter, and previously raised DRAM prices by 70%.

Storage shortages are severe! Korean media: Samsung Electronics will raise NAND prices by 100% in the first quarter, and previously raised DRAM prices by 70%.

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Against the backdrop of surging AI demand leading to extreme shortages in global memory chip supply, Samsung Electronics, the world’s largest memory chip manufacturer, has adopted an aggressive pricing strategy.

On January 25, according to Korean media reports, Samsung Electronics has raised the supply price of NAND flash by more than 100% in the first quarter of this year. This increase far exceeds previous market expectations and highlights the severe supply-demand imbalance currently affecting the semiconductor market.

Industry insiders cited by these media reports say that Samsung Electronics completed supply contract negotiations with key clients at the end of last year and officially implemented the new pricing system starting in January. Following revelations of a nearly 70% increase in DRAM memory prices, this is another major price hike signal in the storage market.

The reports also state that Samsung Electronics has begun a new round of negotiations with customers regarding NAND prices for the second quarter, and the market generally expects the trend of rising prices to continue into that period.

This aggressive pricing strategy reflects the demand for high-performance storage devices driven by AI infrastructure construction. As enterprise-class SSD (eSSD) demand surges due to data center expansion, and "On-Device AI" prompts mobile devices and PCs to upgrade to higher-capacity storage, demand is growing exponentially. However, due to the industry's previously conservative stance on capacity expansion and delays in process upgrades, the supply side has not kept pace, resulting in a market scenario where "products are priced but unavailable."

Industry-Wide Response: From Samsung to SK Hynix

Price hikes are not Samsung's solo act; they are evolving into a collective action across the entire industry. As the top two players in NAND market share, Samsung Electronics and SK Hynix have both adopted similar pricing strategies, revealing the strong bargaining power of leading vendors in a sellers’ market.

Previously, research organization TrendForce predicted a 33% to 38% increase in NAND prices for the fourth quarter of last year and expected similar increases for the first quarter of this year. However, actual market prices have completely shattered these predictions.

Nomura Securities and other overseas investment banks point out that even SanDisk, ranked fifth in the market, plans to raise NAND prices by 100% in the new year. An industry insider commented that, much like the situation with DRAM, NAND manufacturers are joining the price hikes, making comprehensive sector-wide price increases a foregone conclusion.

Core of the Supply-Demand Imbalance: AI-Driven, Rigid Capacity

The root cause of the runaway pricing lies in an extremely tight supply-demand gap. On the demand side, the rapid spread of AI technology is not only boosting high-performance storage needs for servers, but as the "On-Device AI" concept matures, it forces smartphone and PC manufacturers to equip their devices with higher-performance, higher-capacity storage media to support local AI computation.

But on the supply side, the market faces severe constraints from rigid capacity. Over the past year, there has not been any large-scale expansion of capacity in the NAND flash sector. Major manufacturers, including Samsung Electronics, have maintained cautious investment. Although there has been no official production cut, consensus in the industry is that shipment growth is extremely limited. Coupled with the capacity replacement effects brought by process upgrades, effective supply is far from keeping pace with the explosive growth in demand.

The wild fluctuation of memory chip prices is increasingly becoming a bottleneck for the development of the AI industry. With both DRAM and NAND prices surging, the cost of building AI infrastructure is climbing sharply, and there are already concerns that storage costs are hindering the adoption speed of AI technologies.

This cost pressure inevitably passes through to consumers. Industry observers point out that not only AI data centers but also smartphone and PC manufacturers are planning to raise final product prices in response to higher memory costs. Given the long lead time for semiconductor capacity construction, it is unrealistic to rely on increased supply to stabilize prices in the short term.

Risk Warning and DisclaimerThe market involves risk, and investments should be made cautiously. This article does not constitute personal investment advice and does not take into account individual users’ particular investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at your own risk.

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