Samsung Raises Mobile Memory Chip Prices by 20% as Supply Drops

The generative AI boom has brought about a new memory chip renaissance, leading to extremely high demand. Samsung, while referring to the HBM market, stated that it expects this to grow at a highly unprecedented rate – almost doubling down till the next year.

On the other hand, however, in the mobile landscape, things are totally different, since a lack of production has led to a sharp decline in supply. This has led Samsung to increase the prices of it’s mobile memory components by almost 20%, which manufacturers (mostly with low inventory) have also accepted.

Samsung believes that this will re-establish the demand advantage by the fourth quarter of this year. Recent reports do showcase this trend, with major companies like Xiaomi and Google agreeing to the price hike, mainly because of expectations that global demand for their smartphones will also improve the next year.

In addition to this, due to an internal competition between companies for introducing better hardware, industry insiders have reported almost 5% increase in DRAM capacity used each year. Now, newer phones are coming with DDR5X memory, and so, Micron, Samsung and SK Hynix have started adjusting their DRAM production, slowing down on older DDR4.

Memory semiconductor companies are reducing their capex and wafer inputs this year more than planned at the beginning of the year. For both DRAM and NAND flash, supply-side bit growth will decline by more than 4% this year.”

The reason for the initial slowness in demand was because not a lot of companies introduce new products at the start of the year (those that do, have manufacturing already being done beforehand). As the end of the year approaches, companies’ inventory starts to decline, leading to more demand.

This may not matter on a more global scale since mobile memory semiconductors account for less than 3%, so the main focus would still be AI applications, and PC hardware, but for the mobile sector alone, this could be significant in determining the pricing in the future.

This is all we know for now, but rest assured that we will keep you updated as new information becomes available.