According to South Korean media reports, Samsung plans to renegotiate NAND flash prices with major mobile, PC, and server customers from this month to next month, with a target price increase of 15-20%. After more than a year of oversupply, the price of Samsung Electronics' NAND flash memory once approached its cost price. 

Therefore, the company has decided to negotiate with major clients in order to adjust the price to a more reasonable level. 

The report pointed out that there was no conclusion to the price negotiations in the first quarter, but customers were eager to ensure sufficient supply in response to the steady rise in NAND flash market prices. Due to oversupply, Samsung and others will sell related products at prices below cost in 2023 until the capacity utilization rate drops significantly to below 50% in the second half of the year, and supply and demand will only return to balance in the fourth quarter. 

According to research firm TrendForce, the global NAND Flash industry revenue reached $11.49 billion in the fourth quarter of 2023, a quarterly increase of 24.5%. This growth is mainly due to the recovery of terminal demand due to year-end promotions, as well as the expansion of orders in the parts market, resulting in a significant year-on-year increase in storage chip shipments. Among them, Samsung still maintains its leadership position, with Q4 2023 NAND revenue of $4.2 billion, a year-on-year increase of 44.8%, and the highest growth rate among manufacturers. The average selling price of Samsung NAND products has increased by 12% month on month. 

Samsung is not the only company to announce the price increase of NAND. 

Recently, Gou Jiazhang, General Manager of Huirong, one of the world's top two storage flash memory control chip manufacturers, stated that there is no doubt that NAND chips will continue to rise in price, and there is a consensus in the industry that they will increase by another 20% in the second quarter. With the start of sales in North American data centers in March, continued demand after the Lunar New Year, and the three major driving forces of AI applications, this short-term upward trend will not turn back and will continue to rise until the first half of next year. 

According to Gou Jiazhang's analysis, major NAND chip suppliers have suffered serious losses in the past, and the industry will not easily increase production until the quotation reaches the satisfaction point. Even though NAND chip quotations have surged due to the production reduction effect of international giants, they have not risen enough yet. It is widely agreed in the industry to raise prices by another 20% in the second quarter. 

Gou Jiazhang pointed out that not only is the production reduction effect of major manufacturers continuing to ferment, but the NAND industry is currently facing three major drivers of price increases, including the start of sales in North American data centers in March, continued demand after the year, and an increase in demand for AI applications (including AI servers, AI PCs, and AI phones). This year will be a "good year" for the internal storage industry, and the second half of the year will be even more prosperous. 

Gou Jiazhang bluntly stated that the original factory not only needs to raise prices to make the gross profit margin positive, but also needs to continuously increase prices to raise the gross profit margin to over 30% in order to achieve a healthy and reasonable level. Analysis shows that the quotation will continue to rise until the first half of next year. 

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