Memory Price Rise Extends from DRAM to NAND Flash

The upward trend in memory prices, which started with DRAM, has now extended to NAND Flash. the combination of production cuts and demand recovery has resulted in a successful turnaround. Samsung Electronics and SK Hynix are also expected to accelerate the pace of performance improvement.
　Market research firm TrendForce said on November 9, Samsung Electronics expects the fourth quarter of this year, NAND prices will rise 10% to 15%. Another 10% to 20% increase is expected in the first half of next year.
　The actual rise in NAND prices has already begun. According to market research firm DRAMeXchange, the price of general-purpose 128 Gb NAND for memory cards and USB devices has risen 1.59 percent through October. This is the first rebound since July 2021 .
　Although demand recovery remains slow, production cuts are driving prices higher. Unable to afford to sell at a loss, suppliers have extended production cuts to below-cost levels. In fact, Samsung Electronics is reported to be expanding its NAND production cuts to 40 to 50 percent in the first half of next year.
　SK Hynix said on its Q3 earnings call last month that "NAND inventory is higher than DRAM. we will maintain a conservative NAND production approach for the time being."
　In addition, shipments of smartphones and personal computers are also showing signs of growth. According to KB Securities, smartphone and PC shipments next year will grow 5% from the previous year to 1.2 billion units and 260 million units, respectively.
　For smartphones, growth is expected to be driven by cumulative demand for replacement as well as a recovery in demand in China's cell phone market. As for PCs, it is expected that there will be demand for replacement PCs in enterprises due to the impact of the cessation of support for "Windows 10" in 2025.
　In particular, the ongoing semiconductor sanctions imposed by the U.S., which have led Chinese mobile companies to increase their inventories, are seen as a positive factor. As they expand orders, this supports price increases.
　The financial performance of Samsung Electronics and SK Hynix is expected to accelerate their recovery as DRAM prices rise and NAND prices increase.
　Samsung Electronics is expected to see a significant recovery despite the fact that the semiconductor industry alone had a cumulative deficit of 12.69 trillion won ($9.68 billion) as of the third quarter of this year. While the consensus for full-year operating profit is 7.23 trillion won this year, according to the average forecast of securities firms, it is expected to soar to 33.9 trillion won next year, an increase of 368.7 percent.