Samsung Implements 10-20% Price Increase for Mobile Phone Storage Chips

Samsung Electronics, the world's leading manufacturer of memory chips, has recently entered into agreements with its customers to provide DRAM and NAND chips at prices that are 10-20% higher than their existing deals. The Korea Economic Daily reported this development, noting that major clients such as Google, a prominent US tech giant, and several Chinese smartphone manufacturers are included in these contracts.

According to a Samsung executive mentioned in the report, the company foresees a shift in the supply-demand balance within the memory chip market, leading to a potential shortage of supply as early as the fourth quarter of this year. In essence, Samsung anticipates that the demand for memory chips will surpass the available supply in Q4.

In response to this projection, Samsung has also devised a strategy to implement higher prices for its memory chips within its mobile business division, which is responsible for producing the renowned Galaxy series of smartphones. This adjustment reflects the upward trend in mobile chip prices.

Industry experts have observed a decline in chip inventory levels among smartphone manufacturers due to the reduction in chip production since late 2022.

In the upstream market, prices of DRAM chips, particularly LPDDR5X, have been gradually increasing, driven by the recent wave of new smartphone launches.

TrendForce, a market research firm, has reported that Samsung initiated output control measures in the second quarter and is expected to tighten them further in the third quarter. Analysts believe that as inventories continue to decrease, price hikes are inevitable. Korean memory chip manufacturers are determined to raise prices for their latest chips, and this trend of price increases may persist into the fourth quarter. Moreover, some industry executives have noted that in the NAND flash market, customers have ceased reducing their order volumes and have begun to place more orders instead.