Samsung to raise DRAM, NAND prices by over 15%: Sources

[Graphics by Song Ji-yoon]

South Korea’s tech giant Samsung Electronics Co. will raise the prices of server-use DRAM and corporate-use NAND flash memory chips by 15~20 percent in the third quarter.

The hike comes in response to a surge in demand for memory chips driven by artificial intelligence (AI). It is expected to enhance Samsung Electronics’ second-half performance.

According to industry sources on Wednesday, Samsung has recently informed its major customers, including Dell Technologies Inc. and Hewlett Packard Enterprise Co (HPE), of the planned price hike.

The company’s Device Solutions (DS) division, which handles semiconductors, held a global strategy meeting at its Hwaseong plant in Gyeonggi Province on Wednesday to discuss related matters.

The meeting was presided over for the first time by Vice Chairman Jeon Young-hyun, who took over as head of the division last month.

Other attendees included Lee Jung-bae, president of memory business, Choi Si-young, president of foundry business, and Park Yong-in, president of system large-scale integration (LSI).

Samsung raised the price of its enterprise NAND flash by more than 20 percent in the second quarter.

This large-scale price hike, continuing into the second half of the year, is being driven by the AI boom leading to increased server demand.

According to market research firm DRAMeXchange, global enterprise NAND flash sales reached $3.76 billion in the first quarter of 2024, up 62.9 percent from the previous quarter. The surge in demand has even led to shortages of some products, further motivating customers to secure their supply.

The price of DDR4 (64GB), a representative server DRAM, was initially expected to rise slightly to $144 in the third quarter from $140 in the previous quarter, but it is now likely to trade at over $160.

“Customers who typically provided quarterly demand plans are now presenting annual plans to chipmakers, which shows heightened focus on securing supply,” said an industry insider. “Given the current supplier-dominated market, final negotiation prices could increase by more than 15 percent.”

Last year, Samsung‘s DS division logged a record loss of 15 trillion won ($10.78 billion) due to the industry downturn.

However, in the first quarter of this year, it managed to swing to an operating profit of 1.91 trillion won, marking the first profit in five quarters.

Samsung Electronics is scheduled to announce its preliminary second-quarter results on July 5.

Analysts estimate that the DS division will achieve 26~27 trillion won in sales and 4 trillion won in operating profit.