Samsung Electronics, which has begun substantial cutbacks in its NAND flash division in the latter half of this year, is reportedly planning a double-digit price increase as early as this month. All eyes are on how the pricing move by Samsung, a dominant player in the market, will affect other competing companies such as Kioxia, SK, Western Digital, and more.
According to semiconductor industry sources on Oct. 4, Samsung Electronics is planning to implement a price increase of over 10 percent for NAND products during the fourth quarter of this year. It is anticipated that the increased prices will be applied to new contracts as early as this month.
As the undisputed leader in the global memory semiconductor industry, Samsung Electronics has been implementing a reduction strategy since the first half of this year to counter the worst semiconductor downturn it has faced since the latter half of last year.
In January of this year, Samsung Electronics declared a “practical reduction” by naturally adjusting wafer input, and in April, it unveiled a “deliberate reduction” approach by intentionally reducing wafer input. Moreover, the company is intensifying its reduction efforts in the latter half of this year. Industry insiders estimate that Samsung Electronics has expanded the reduction magnitude, reaching up to 30 percent for DRAM and 40 percent for NAND in the second half of this year.
In the DRAM sector, which initiated reductions earlier, a price rebound is being observed. Customer inventories have partially decreased as server companies are placing orders, and there is an expanding demand for personal technology devices such as mobile phones and laptops.
However, the price of NAND products still hasn’t seen a rebound, necessitating a breakthrough. In response, Samsung Electronics plans to further expand the reduction efforts, reduce supply, and increase prices by more than double digits in search of a turnaround.