Samsung plans to renegotiate the price of NAND flash memory with its major mobile device, PC and server customers between March and next month, aiming to raise prices by 15 to 20 percent, according to Korean media reports. The supply glut has lasted for more than a year, and Samsung's NAND flash memory has been selling at close to cost.
In order to adjust the price to a more reasonable level, the company decided to start negotiations with large customers.
According to the report, Samsung plans to renegotiate the price of NAND flash memory with its major mobile device, PC and server customers between March and next month, aiming for a price increase of 15 to 20 percent. The supply glut has lasted for more than a year, and Samsung's NAND flash memory has been selling at close to cost.
In order to adjust the price to a more reasonable level, the company decided to start negotiations with large customers.
Price talks in the first quarter have yet to reach a conclusion, but customers are eager to ensure adequate supply as prices in the NAND flash market have steadily increased. Due to oversupply, companies such as Samsung had to sell related products at below cost prices in 2023 until capacity utilization fell below 50% in the second half of the year, and supply and demand could not return to balance.
According to TrendForce research data, the global NAND Flash industry revenue reached $11.49 billion in the fourth quarter of 2023, an increase of 24.5% from the previous quarter. This growth was mainly due to the recovery of terminal demand during the year-end promotion period, as well as the expansion of parts market orders, and the shipment of memory chips increased significantly year-on-year. Among them, Samsung still maintains a leadership position, with NAND flash revenue of $4.2 billion in the fourth quarter of 2023, an increase of 44.8%, which is also the highest growth rate among manufacturers. Samsung's average unit price for NAND products rose 12 percent month-on-month.
In addition to Samsung, other companies have also released news of NAND flash memory price increases.
Recently, Gou Jiazhang, general manager of Hui Rong, the world's top two storage flash memory control chip manufacturers, said that the continued price increase of NAND chips is no doubt, and the industry has generally reached a consensus that it is expected that the second quarter will increase by 20%. With North American data centers starting to restock in March, unreduced demand after the Lunar New Year, and artificial intelligence applications, the three driving factors, this wave of price increases will not stop in the short term, and is expected to continue until the first half of next year.
Gou Jiazhang analysis said that before, the major NAND chip suppliers are facing serious losses, so before the offer reaches the point, the industry will not easily increase production. Although under the influence of international manufacturers to reduce production, the previous NAND chip quotation has risen sharply, but it has not risen enough, and another 20% price increase in the second quarter has become the general consensus of the industry.
Gou Jiazhang pointed out that not only the production reduction effect of large factories continues to ferment, the current NAND industry is also assisted by three major driving factors, including the replenishment of North American data centers in March, the demand has not decreased after the Lunar New Year, and the demand for artificial intelligence applications (including AI servers, AI computers and AI mobile phones). For the memory chip industry, this year will be a good year, and the second half is more prosperous.
Gou Jiazhang made it clear that the original factory should not only raise the price to the level of profitability, but also increase the gross profit margin to more than 30% through continuous price increases, which is a healthy and reasonable level. He analyzed that the price will continue to rise until the first half of next year.
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