"Adding fuel to the fire"! Reports indicate that Samsung has significantly raised memory and flash prices by up to 30%

Following Morgan Stanley and others' optimistic outlook on traditional storage, memory giants collectively announced price increases!

On Monday, Samsung significantly raised the prices of memory and flash products, with DRAM products increasing by up to 30% and NAND flash prices rising by 5-10%, due to supply constraints and a surge in demand from cloud enterprises. Competitors such as Micron and SanDisk also announced similar price hikes, with Micron's increase reaching 20-30% and suspending new orders.

According to South Korean media Newdaily, Samsung raised the prices of LPDDR4X, LPDDR5, and LPDDR5X memory products by 30%, while eMMC and UFC NAND flash products saw a price increase of 5-10%. The supply constraints are primarily due to reduced production of older products and increased demand from major cloud service providers.

This round of price increases reflects a structural transformation in the memory industry. Manufacturers are shifting their focus to emerging markets such as AI PCs and next-generation smartphones, leading to a contraction in the supply of traditional products. Morgan Stanley expects that as competition in the HBM market intensifies, traditional DRAM and NAND products are likely to see more sustainable growth by 2026.

Industry Giants Raise Prices Collectively

Samsung is not acting alone. Micron has notified customers of a 20-30% price increase while suspending new orders. SanDisk announced a 10% price increase for NAND flash products. This indicates that the entire memory industry is facing supply-demand imbalance pressures.

The fundamental reason for the supply constraints lies in the shift in industry focus. As AI PCs and next-generation smartphones adopt LPDDR5/X standards, manufacturers have reduced production of older products, but the capacity for the new standards has not kept pace with the growth in demand. DDR4 memory prices have surged by 50%, making DDR5 a more cost-effective PC solution.

The rise in memory prices will directly impact the procurement costs of consumer electronics and enterprises. As one of the largest memory manufacturers globally, Samsung's pricing strategy typically leads the industry, and there are concerns that supply constraints may persist until 2025.

HBM Demand Squeezes Supply of Traditional Products

The surge in demand for high-bandwidth memory (HBM) has become a key factor driving up prices. Major DRAM manufacturers are shifting towards the AI sector, prioritizing the supply of the latest products to companies like NVIDIA and AMD for AI accelerators. This adjustment in priorities has led to tighter supply of consumer-grade DRAM.

Samsung currently holds a 32.7% market share in DRAM and a 32.9% market share in NAND. The company is working to gain support from NVIDIA to promote its HBM products while accelerating the development of LPDDR6 DRAM, with the first designs expected to launch later this year.

Previously, Morgan Stanley stated in a research report that the "premium myth" of HBM faces challenges, with fierce competition and pricing pressure expected by 2026. Against the backdrop of anticipated interest rate cuts by the Federal Reserve and an improving macro environment, market funds are shifting from AI-driven HBM to traditional storage sectors, with Morgan Stanley particularly optimistic about the investment value of traditional DRAM.

The tightening supply-demand structure of DRAM and NAND seems to reinforce the necessity for price increases. Citigroup predicts that next year, the supply of DRAM and NAND flash will be short by 1.8% and 4%, respectively Morgan Stanley also predicts that next year the supply of NAND will be short by as much as 8%