Samsung hikes memory chip prices by up to 60% as shortage worsens: sources
The chip crunch has been so severe that it has spurred panic buying by some customers, according to industry executives and analysts
[SEOUL/SINGAPORE] Samsung Electronics this month raised prices of certain memory chips, now in short supply due to the global race to build artificial intelligence (AI) data centres, by as much as 60 per cent compared to September, two sources with knowledge of the hikes said.
Shares of Samsung, SK Hynix and US chipmakers rallied sharply on the news which underlines how the boom in AI has stoked intense demand for chip units specifically designed for AI tasks as well as the memory chips used in those units.
The price hike follows a decision by Samsung, the world’s biggest memory chipmaker, to delay a formal announcement of pricing for supply contracts in October, the sources said, adding that pricing details are typically announced each month.
Soaring prices for these memory chips, which are mainly used in servers, are likely to add to stress for big companies building out data infrastructure. They also threaten to increase the costs of other products, such as smartphones and computers, in which they are also used.
Extreme prices being paid
Many of the largest server makers and data centre builders are “now accepting that they won’t get nearly enough product. The price premiums being paid are extreme”, Tobey Gonnerman, president of semiconductor distributor Fusion Worldwide, said.
The South Korean firm’s contract prices for 32 gigabyte(GB) DDR5 memory chip modules jumped to US$239 in November, up from US$149 in September, he said.
After Reuters’ initial report on Friday, shares in US chipmakers jumped with Micron Technology climbing 4 per cent. In Monday morning trade, Samsung’s shares advanced 3 per cent and SK Hynix surged 6 per cent. All three stocks were regaining ground after earlier falls on concerns about stretched AI valuations.
DDR memory chips are used in servers, computers and other devices, assisting with computing performance by temporarily storing data and managing rapid data transfer and retrievals.
Samsung also lifted prices of 16GB DDR5 and 128GB DDR5 chips by about 50 per cent to US$135 and US$1,194, respectively. Prices of 64GB DDR5 and 96GB DDR5 have gone up by more than 30 per cent, Gonnerman said.
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The price hikes were confirmed by another source who was briefed by Samsung. The source declined to be identified as the information is not public.
New factory plan
Samsung declined to comment. It separately announced on Sunday that it will build a new chip production line at its plant in South Korea, as it expects AI will drive demand for the mid- and long-term.
The chip crunch has been so severe that it has spurred panic buying by some customers, according to industry executives and analysts.
China’s top contract chipmaker SMIC said on Friday that the memory chip shortage has meant that customers are holding back orders for other types of chips that are also used in their products.
Xiaomi, a Chinese smartphone, electronics and auto manufacturer, also warned last month that the surging prices have raised the cost of making phones.
The shortage is, however, a boon for Samsung which has lagged rivals in offering advanced AI chips and had, until recently, not seen its profits climb nearly as much.
Its slower shift to AI chips has also meant Samsung has better pricing power than smaller rivals in memory, such as SK Hynix and Micron, according to Jeff Kim, head of research at KB Securities.
TrendForce analyst Ellie Wang said Samsung is likely to raise quarterly contract pricing by 40 to 50 per cent in the October to December period, higher than the average 30 per cent expected for the wider industry.
“They are really confident that the price is going to increase. And the main reason is that now the demand is really strong, and everyone is working on long-term agreements with the suppliers,” she said, adding that those agreements are either for 2026 or both 2026 and 2027 combined. REUTERS
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