Samsung: DRAM contract prices surge 100%!

According to South Korean media reports on March 4, Samsung Electronics has confirmed that DRAM prices rose an average of 100% in the first quarter, with some products even exceeding 100%.

The increase of around 70% agreed in January was further expanded in just one month. The surge in memory demand driven by the widespread adoption of artificial intelligence (AI) has even affected monthly fluctuations in DRAM prices.

Industry sources revealed on the 4th that Samsung Electronics finalized first-quarter DRAM supply prices with major customers last month. Prices for general-purpose DRAM used in servers, PCs, mobile devices and other fields rose an average of about 100% quarter-on-quarter.

This means prices have doubled from the fourth quarter of last year, and sources noted that increases for some customers and products have even surpassed 100%.

An industry insider familiar with the matter revealed:“Samsung Electronics has completed DRAM supply price negotiations, and some overseas customers have already made payments.”The source added that “the price adjustment reflects fluctuations between January and February, so an additional price increase has been implemented.”

In January this year, Samsung Electronics raised DRAM prices by 70% quarter-on-quarter, while NAND flash prices surged by as much as 100%.Such steep increases at the time triggered a strong reaction across the industry. Despite the sharp rise in memory prices, customers continued to queue up to secure supplies.

It is reported that some overseas tech giants have traveled to South Korea to negotiate with memory manufacturers including Samsung Electronics in order to lock in supply volumes in advance.Samsung Electronics has continued price negotiations with customers while taking its own supply capacity into consideration.

Analysts believe that surging demand during supply negotiations led to another price hike following January’s increase.

DRAM and other memory supply contracts are typically signed on an annual basis.Recently, amid supply shortages, memory manufacturers have been pushing for quarterly contracts. With extreme price volatility, there is now even consideration of monthly contract terms.

Samsung is not the only company driving memory prices higher.Industry estimates suggest SK Hynix and Micron Technology have also signed supply contracts for the first quarter at similar price levels.

The expansion of AI infrastructure investment worldwide has triggered this unusual trend.As the number of AI service providers (data centers) purchasing AI semiconductors increases, demand for High Bandwidth Memory (HBM)—which supports computing operations—has risen sharply.

Production capacity at Samsung Electronics, SK Hynix, and Micron has been concentrated on HBM, limiting the supply of DRAM for servers, PCs, and mobile devices.Strong demand and insufficient supply extend beyond AI servers to AI PCs and AI smartphones, sending prices soaring.

Given that artificial intelligence development is still ongoing, the upward trend in memory prices is expected to continue for some time.

Nvidia, the world’s largest AI chipmaker, posted its strongest-ever results last month, thoroughly refuting claims of an AI bubble.

Market research firm Gartner forecasts that DRAM and solid-state drive (SSD) prices will rise 130% year-on-year on a combined basis.

An industry insider stated:“DRAM and NAND prices will continue to rise in the second quarter.”“The pace of increase may slow, but the upward trend itself is inevitable.”