Samsung Electronics to raise NAND prices in 2024

HBM3E [Courtesy of Samsung Electronics]

Memory chip maker Samsung Electronics Co. has formed a strategy to increase NAND prices by 20 percent each quarter until the second quarter of 2024. The move is the company’s bid to reverse the market in the first half of next year by stabilizing NAND prices.

According to multiple sources from the semiconductor industry on Tuesday, Samsung Electronics decided to raise NAND prices by 20 percent in the first and second quarters of 2024, following a 10 to 20 percent increase in the fourth quarter of 2023.

NAND is a staple memory chip alongside DRAM, and together they account for around half of Samsung Electronics’ memory chip sales.

However, unlike DRAM, where a price recovery trend was recently detected, NAND prices have remained low.

Samsung Electronics plans to aggressively raise prices in addition to reducing production in order to recover profitability.

“The reduction in NAND production adjustment will be operated relatively larger for the time being compared to DRAM,” Samsung Electronics executive vice president Kim Jae-joon said during a conference call on Tuesday after announcing the company’s third-quarter earnings.

Samsung Electronics also announced that it will be more aggressive in the burgeoning high bandwidth memory (HBM) market.

“We are expanding production of HBM3 and HBM3E,” Kim said. “We plan to secure more than 2.5 times the HBM supply capacity in 2024 compared to this year.”

The executive vice president added that Samsung Electronics has completed supply negotiations with major customers for the volume.

In addition to memory chips, Samsung Electronics is also seeking a turnaround in the foundry business next year.

Samsung Electronics’ foundry division is known to have recorded more than 500 billion won ($369.8 million) in losses in the third quarter of 2023. Despite the sluggish performance due to a decrease in line operation rates, it nabbed its largest quarterly order to date.

The brokerage industry projected that Samsung Electronics’ performance will improve significantly from the fourth quarter of 2023.

“With an increase in demand in the fourth quarter, including DRAM, semiconductor sector performance is expected to increase significantly,” DB Financial Investment analyst Seo Seung-yeon said.