Storage chip "super cycle" accelerates: Samsung and SK Hynix both raise prices by 30%, with some customers locking in long-term contracts for 2-3 years

The memory "super cycle" triggered by artificial intelligence is accelerating comprehensively, forcing major global suppliers to significantly raise prices and driving customers to rush to secure long-term supplies to cope with the increasingly severe shortage risks.

According to media reports on the 23rd, Samsung Electronics and SK Hynix have raised their DRAM and NAND flash prices by up to 30% in the fourth quarter and have passed the new pricing system on to customers. This move is a direct response from the memory giants to the current market supply-demand imbalance, and the price increase cycle has officially begun.

As concerns about supply shortages intensify, large customers are taking rare actions. Reports indicate that some electronic companies and data center operators in the United States are negotiating medium to long-term supply contracts lasting 2 to 3 years with Samsung and SK Hynix.

The market generally expects that this AI-driven supply shortage will last longer and be stronger than any previous boom cycle. Reports cite analysts' views that the shortage may persist for three to four years. Behind this prediction are multiple factors, including new AI server investments worth trillions of Korean won, ongoing memory upgrades for general servers, and the rise in demand for edge AI devices.

HBM squeezing capacity exacerbates supply tightness

In the face of ongoing expectations of supply tightness, the procurement model in the memory market is undergoing a structural transformation.

Traditionally, companies have generally preferred to sign quarterly or annual DRAM contracts to maintain flexibility in inventory management. However, as forecasts indicate that general DRAM will continue to be in short supply, companies are increasingly turning to secure additional supplies in advance. American electronics giants and data center operators have begun exploring 2 to 3-year medium to long-term agreements with the two major memory manufacturers in South Korea to ensure the stability of their supply chains in the coming years.

One reason for the rise in DRAM prices is that capacity is being squeezed by high bandwidth memory (HBM). Reports quote Micron's Chief Business Officer Sumit Sadhana as saying that the wafer capacity consumed by HBM is more than three times that of standard DRAM. Due to the lucrative profits, memory manufacturers have strong incentives to prioritize HBM production. Analysts expect that the price of 12-layer HBM4 products shipped next year will be $500 per piece, more than 60% higher than the current price of about $300 for 12-layer HBM3e.

AI boom drives all-around demand

The driving force behind this round of memory super cycle is not limited to HBM but shows a comprehensive growth in demand. Analysts believe that the intensity and duration of this cycle will exceed previous ones. Driving factors include: massive new investments by companies in AI servers, memory upgrades for general servers to support AI applications, and the proliferation of "edge AI" features on devices such as smartphones and PCs.

Moreover, as the focus of AI investment shifts from large-scale data training to inference applications, the market demand for general DRAM is also rising in tandem, as general DRAM has advantages in processing speed and power consumption, further exacerbating the supply-demand imbalance in the entire DRAM market