Samsung Electronics Mobile Memory Price Increase... Rising Expectations for Market Recovery

Increased Product Prices Supplied to Smartphone Clients
Memory Industry Production Cuts Effect... "Contract Price Stabilization"

There are reports that Samsung Electronics has raised the selling prices of memory semiconductors for mobile devices. As memory prices rebound within the year due to industry-wide production cuts, there are growing expectations that the market recovery could gain momentum.

On the 13th, it was reported that Samsung Electronics recently increased the selling prices while supplying DRAM and NAND to smartphone manufacturers. Although prices for mobile DRAM and NAND had been declining for more than one to two years, Samsung Electronics has raised prices for some products this time.

Samsung Electronics stated that it is difficult to comment on pricing. However, industry insiders suggest that the rate of increase could range from single digits up to double digits. Kim Sun-woo, a researcher at Meritz Securities, said in a recent report, "Samsung Electronics' mobile DRAM and NAND product prices are expected to increase by 7-9% and 1-2%, respectively, in September."

Samsung Electronics LPDDR5X DRAM image / [Image courtesy of Samsung Electronics]

This change appears to be due to major companies, including Samsung Electronics and SK Hynix, all cutting memory production. Market research firm TrendForce stated in last month's DRAM market report that "the tendency for prices to fall after suppliers reduce production is diminishing," and "contract prices are stabilizing." They also forecast that in the third quarter, prices for high-value-added mobile DRAM products, such as Low Power Double Data Rate (LPDDR) 5X, could rise by 5%.

NAND prices are also likely to rebound within the year. TrendForce noted that the rate of NAND price decline slowed from the second to the third quarter and that prices could increase by up to 5% in the fourth quarter. They explained, "Samsung Electronics' aggressive production cuts are likely to lead to price increases for key products." In fact, Samsung Electronics has announced plans to expand production cuts mainly for NAND in the second half of the year.

The industry expects that market recovery could gain full momentum as early as the second half of the year. Baek Gil-hyun, a researcher at Yuanta Securities, predicted, "Supply expansion will be limited next year," and "the upward trend in memory prices could fully materialize starting in September." With market improvement next year, demand for semiconductor equipment in the memory industry is also expected to increase. The Semiconductor Equipment and Materials International (SEMI) forecasted that memory fab equipment investment next year could reach $27 billion, a 65% increase compared to this year.