Price increase extends from DRAM to NAND

The upward trend of memory prices started with DRAM and has now expanded to NAND Flash. The combination of production reduction and demand recovery has successfully turned losses into profits. It is expected that the pace of performance improvement for Samsung Electronics and SK Hynix will also accelerate.
 

Samsung Electronics expects NAND prices to rise by 10% to 15% in the fourth quarter of this year. It is expected to increase by another 10% to 20% in the first half of next year.
 

The actual increase in NAND prices has already begun. The price of universal 128 Gb NAND for storage cards and USB devices has increased by 1.59%. This is the first rebound since July 2021.
 

Although demand recovery is still slow, reduced production has driven up prices. Due to the inability to withstand loss making sales, the supplier has expanded the reduction in production to a level below cost. In fact, Samsung Electronics will expand the reduction in NAND production to 40% to 50% in the first half of next year.
 

In addition, there are signs of growth in shipments of smartphones and personal computers. According to KB Securities, the shipment volume of smartphones and PCs next year will increase by 5% compared to the previous year, reaching 1.2 billion units and 260 million units respectively.
 

For smartphones, the expected accumulation of replacement demand and the recovery of demand in the Chinese mobile phone market will drive growth. As for PCs, it is expected that due to the impact of discontinuing support for Windows 10 in 2025, companies will have a need to replace PCs.
 

Especially the continuous implementation of semiconductor sanctions by the United States has led to an increase in inventory by Chinese mobile companies, which is seen as a positive factor. As they expanded their orders, this supported the price increase.
 

With the increase in DRAM prices and NAND prices, the financial performance of Samsung Electronics and SK Hynix is expected to accelerate recovery.