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

Against the backdrop of a surge in AI demand leading to extreme tightness in global storage chip supply, Samsung Electronics, the world's largest storage chip manufacturer, has adopted an aggressive pricing strategy. On January 25, according to South Korean media reports, Samsung Electronics raised the supply price of NAND flash memory by over 100% in the first quarter of this year, a hike well above market expectations, highlighting the severe supply-demand imbalance in the current semiconductor market. According to industry insiders, Samsung Electronics completed supply contract negotiations with major customers at the end of last year and officially implemented a new pricing system starting in January. This move follows a nearly 70% increase in DRAM memory prices and signals another significant price adjustment in the storage market. Reports indicate that Samsung Electronics is currently in negotiations with customers for NAND prices in the second quarter, with market expectations suggesting that the upward trend in prices will continue into the second quarter. This aggressive pricing strategy reflects the demand for high-performance storage devices in AI infrastructure construction. With the explosion of demand for enterprise solid-state drives (eSSDs) due to data center expansions and the push for "On-Device AI" driving mobile devices and PCs towards high-capacity storage upgrades, demand is growing exponentially. However, due to the industry's previous cautious approach to capacity expansion and lagging process conversions, the supply side has not kept up, leading to a situation where there is demand but no supply. Industry-wide follow-up: From Samsung to SK Hynix Raising prices is not just Samsung Electronics' solo performance, but is evolving into a collective action across the industry. As the top two players in the NAND market, Samsung Electronics and SK Hynix have adopted similar pricing strategies, demonstrating strong bargaining power in the seller's market. Previously, market research firm TrendForce predicted that NAND prices would increase by 33% to 38% in the fourth quarter of last year and expected similar increases in the first quarter of this year. However, actual market prices completely shattered this forecast. Overseas investment banks such as Nomura Securities pointed out that even market fifth-placed SanDisk plans to raise NAND prices by 100% in the new year. An industry insider stated that similar to the situation with DRAM, NAND manufacturers have joined the price hike trend, and industry-wide across-the-board price increases have become a certainty. The core of the supply-demand imbalance: AI driving and rigid capacity The root cause of price control lies in the extremely tight supply-demand gap. On the demand side, the rapid spread of AI technology not only drives high-performance storage demand at the server end, but also forces smartphone and PC manufacturers, due to the implementation of "On-Device AI," to incorporate higher-performance, higher-capacity storage media in their devices to support local AI computing. However, on the supply side, the market faces serious capacity constraints. In the past year, there has been no significant capacity expansion in the NAND flash memory field, with major manufacturers including Samsung Electronics maintaining a cautious stance on investment. Although not reaching the extent of public production cuts, the industry's consensus is that shipment growth is extremely limited. Coupled with the capacity displacement effect brought about by process upgrades, actual effective supply has not kept up with the explosive demand. The drastic fluctuations in storage chip prices are becoming a bottleneck in the development of the AI industry. With the double increase in DRAM and NAND prices, the construction cost of AI infrastructure has sharply risen, leading to concerns that the cost of storage is hindering the pace of AI technology proliferation. 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 are planning to increase the final product's prices in response to rising memory costs. Given the long-cycle nature of semiconductor capacity construction, it is not realistic to suppress prices in the short term by increasing supply. This article was originally published by Wall Street. Written by: Chen Yufeng, edited by GMTEight.