According to BusinessKorea, South Korean storage giant Samsung Electronics plans to increase NAND chip prices by more than 10% in the fourth quarter, with the earliest price hike starting in October. Industry experts believe that contract prices for DRAM and NAND in the fourth quarter are expected to rise by 10% to 15%.
According to reports, Samsung Electronics is set to increase NAND chip contract prices, starting from new orders signed in October. This is the latest strategy aimed at boosting NAND chip prices after previously announcing a reduction in NAND chip production. Due to lower profits from NAND chips compared to DRAM chips, Samsung has been actively working to normalize prices. Samsung has set a goal to break even in its NAND chip business in the second quarter of next year, and therefore, they have decided to raise chip prices alongside production cuts.
Han Dong-hee, an analyst at SK Securities, stated, ‘Samsung Electronics’ second wave of production cuts and its profit-oriented policy are expected to stimulate the rebound of storage chip prices.’
On the other hand, Samsung, SK Hynix, and Micron’s continuous reduction in supply aims to drive up contract and spot prices for DRAM and NAND. Taiwanese industry experts pointed out that among current DRAM spot quotations, DDR5 has seen the most significant increase, mainly due to lower inventory levels. Although DDR4 inventory levels are relatively high, the three major manufacturers are focusing their production cuts on DDR4, while expanding production for DDR5. It is expected that by the end of 2023, DDR5’s sales share will reach 30% to 40%, creating a golden cross with DDR4 usage.
However, it’s worth noting that the utilization rates of mature process capacity at logic foundries have not shown a significant rebound, and future demand sustainability will need to be observed.
Currently, it is a market consensus that module manufacturers will raise prices for customers in the fourth quarter, and contract prices are also expected to rise along with spot prices. Module manufacturers are expected to react first in terms of profit, while storage manufacturing and foundry companies are expected to see a delayed recovery due to their continued support of prices through production cuts.
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