Storage is in a crazy shortage! Korean media: Samsung Electronics will raise NAND prices by 100% in the first quarter, while DRAM was previously raised by 70%

Against the backdrop of a surge in AI demand leading to extreme tightness in global storage chip supply, the world's largest storage chip manufacturer, Samsung Electronics, has adopted an aggressive pricing strategy.

On January 25, South Korean media reported that Samsung Electronics has raised the supply price of NAND flash memory by over 100% in the first quarter of this year, a significant increase that far exceeds market expectations, highlighting the severe supply-demand imbalance in the current semiconductor market.

According to industry insiders cited by the media, Samsung Electronics completed negotiations on supply contracts with major customers at the end of last year and officially implemented the new pricing system starting in January. This follows the revelation that DRAM memory prices were raised by nearly 70%, marking another significant price adjustment signal in the storage market.

Reports indicate that Samsung Electronics is currently in the process of negotiating a new round of NAND prices with customers for the second quarter, with the market generally expecting the upward price momentum to continue into the second quarter.

This aggressive pricing strategy reflects the demand for high-performance storage devices driven by AI infrastructure development. As the demand for enterprise solid-state drives (eSSD) surges due to data center expansion, and "On-Device AI" pushes mobile devices and PCs to upgrade to higher-capacity storage, the demand side is experiencing exponential growth. However, constrained by the industry's previous conservative attitude towards capacity expansion and delays in process transitions, the supply side has not been able to keep pace, leading to a situation of "priced but unavailable" in the market.

Industry-Wide Follow-Up: From Samsung to SK Hynix

The price increase is not just a solo act by Samsung Electronics but is evolving into a collective action across the industry. As the top two giants in the NAND market, both Samsung Electronics and SK Hynix have adopted similar pricing strategies, demonstrating the strong bargaining power of leading manufacturers in a seller's market.

Previously, market research firm TrendForce had predicted a NAND price increase of 33% to 38% in the fourth quarter of last year and expected a similar increase in the first quarter of this year. However, the actual market execution prices completely broke this prediction.

Overseas investment banks such as Nomura Securities pointed out that even SanDisk, ranked fifth in the market, plans to raise NAND prices by 100% in the new year. An industry insider stated that, similar to the situation with DRAM, NAND manufacturers are joining the price increase trend, and a comprehensive price hike across the industry has become a foregone conclusion.

Core of Supply-Demand Imbalance: AI Drive and Capacity Rigidity

The root cause of the price chaos lies in the extreme tightness of the supply-demand gap. On the demand side, the rapid spread of AI technology has not only driven high-performance storage demand on the server side but also, due to the realization of the "On-Device AI" concept, forced smartphone and PC manufacturers to incorporate higher-performance, larger-capacity storage media in their devices to support local AI computations.

However, on the supply side, the market faces severe capacity rigidity constraints. Over the past year, there has been no large-scale capacity expansion in the NAND flash memory sector, with major manufacturers, including Samsung Electronics, maintaining a cautious investment attitude. Although it has not reached the level of publicly reducing production, the consensus in the industry is that the growth in shipment volumes is extremely limited. Coupled with the capacity replacement effects brought about by process upgrades, the actual effective supply has not kept pace with the explosive demand The drastic fluctuations in storage chip prices are becoming a bottleneck for the development of the AI industry. With the dual rise in DRAM and NAND prices, the construction costs of AI infrastructure have significantly increased, and there are concerns that storage costs are hindering the speed of AI technology adoption.

This cost pressure inevitably transmits to the consumer end. Industry observers point out that not only AI data centers but also smartphone and PC manufacturers plan to raise the prices of final products in response to the rising memory costs. Given the long-cycle nature of semiconductor capacity construction, it is unrealistic to stabilize prices in the short term by increasing supply