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Samsung Memory Chip Prices Surge Amid Global AI Demand

Samsung Electronics has raised prices for some memory chips by up to 60% compared to September, according to sources familiar with the matter. The increase comes as AI data centers drive strong global demand for memory chips and specialized AI units.

The price hike followed a decision by Samsung to delay its usual monthly announcement of supply contract pricing in October. These soaring prices are likely to increase costs for servers, computers, and other devices that use these memory chips.

“The largest server makers and data center builders are now accepting that they won't get nearly enough product. The price premiums being paid are extreme,” said Tobey Gonnerman, president of semiconductor distributor Fusion Worldwide.

Samsung’s contract prices for 32GB DDR5 memory modules jumped to $239 in November, up from $149 in September. Prices for 16GB DDR5 and 128GB DDR5 chips rose by about 50% to $135 and $1,194, respectively. Meanwhile, 64GB and 96GB DDR5 chips increased by more than 30%.

Industry Reactions and Stock Market Gains Following Price Hikes

Following Reuters’ report, shares of Samsung, SK Hynix, and U.S. chipmakers rose sharply. Micron Technology climbed 4%, Samsung’s shares advanced 3%, and SK Hynix surged 6%. These gains came after earlier declines linked to concerns over high AI valuations.

DDR memory chips help computers and servers temporarily store data and manage rapid data transfer, supporting high-performance computing across devices.

New Samsung Factory Plans to Meet Long-Term AI Chip Demand

Samsung announced plans to build a new chip production line at its South Korea plant, anticipating that AI will drive demand in the mid- and long-term. Industry sources said the chip shortage has caused some customers to buy in panic.

China’s top contract chipmaker SMIC said the shortage is causing customers to hold back orders for other chips. Xiaomi warned last month that rising memory chip prices are increasing phone production costs.

Market Implications and Strategic Advantages for Samsung

The shortage benefits Samsung, which has lagged rivals in advanced AI chips but now has stronger pricing power in memory compared to smaller competitors like SK Hynix and Micron, said Jeff Kim, head of research at KB Securities.

TrendForce analyst Ellie Wang said Samsung is likely to raise quarterly contract pricing by 40% to 50% in October–December, above the industry average of 30%. “They are really confident that the price is going to increase. The main reason is that now the demand is really strong, and everyone is working on long-term agreements with the suppliers,” she added.

PHOTO: SAMSUNG

This article was created with AI assistance.