Samsung plans to gradually increase NAND flash memory prices by mid-2024

Samsung has commenced curtailing production of DRAM chips and NAND flash memory since the second quarter of this year to counter the slackening demand and consequent price decline. Starting from September, the reduction in NAND production has been amplified to 50%, primarily affecting products employing sub-128-layer technology. This strategy is intended to expedite inventory depletion while simultaneously stabilizing NAND flash memory prices.

Before Samsung’s move, peers such as Micron and SK Hynix had already implemented similar cutbacks. Samsung, traditionally an adherent of a counter-cyclical strategy, found itself compelled to scale back production, deliberately constricting supply to mitigate the price fall and bridge the gap in losses. Those monitoring the recent market trends for memory and SSDs will have noticed that the manufacturers’ production cutbacks are beginning to bear fruit, with a rebound in prices now observable.

A recent report from market research firm TrendForce indicates that Samsung is planning a gradual increment in NAND flash memory prices, anticipating a 20% rise each quarter before mid-2024. This would suggest the possibility of three consecutive 20% price hikes over the next two and a half quarters. It’s understood that Samsung has already increased prices for various NAND flash memories by 10% to 20% this quarter.

Samsung’s actions have triggered a ripple effect, with enterprise SSD prices climbing by 5% to 10%. It is projected that by the end of this year, consumer SSD prices will experience an 8% to 13% surge. While these increments may seem moderate compared to the previous substantial price drops of storage products, the rapid succession of price hikes could lead to an eventual increase of 30% to 40% shortly.

Competitors are likely to follow Samsung’s lead in raising NAND flash pricing, potentially magnifying the impact on the market.