Samsung lifts memory chip prices up to 60% as AI demand fuels shortage

Samsung has raised prices of key memory chips by up to 60 per cent as AI data centres drive huge demand, causing a global shortage and pushing up costs for servers

Samsung Electronics has sharply raised prices for some memory chips, by as much as 60 per cent since September, as demand surges from companies racing to build AI data centres, news agency Reuters reported.

 

Why it matters

 

• Server makers and data centre builders are already struggling to secure enough chips.

• Rising memory chip prices could raise costs for smartphones, computers and other devices.

Driving the news

 

Samsung, the world’s largest memory chipmaker, delayed announcing October contract prices. Pricing is normally shared monthly.

 

The company’s 32GB DDR5 modules jumped to $239 in November, up from $149 in September, according to Tobey Gonnerman, president of Fusion Worldwide.

 

By the numbers

 

(Photo: Google Gemini) 

Between the lines

 

• “Many of the largest server makers and data centre builders are now accepting that they won't get nearly enough product. The price premiums being paid are extreme,” Gonnerman told Reuters.

• The shortage has triggered panic buying among some customers, industry executives said.

• China’s top contract chipmaker SMIC said the crunch is forcing customers to delay orders for other chips.

• Xiaomi warned last month that surging memory costs are pushing up smartphone production expenses.

 

The big picture

 

• The shortage is helping Samsung’s profits recover after lagging behind rivals in advanced AI chips.

• Its slower shift into AI-focused semiconductors has left more room in its memory business, giving it stronger pricing power than competitors SK Hynix and Micron, Jeff Kim of KB Securities told Reuters.

What’s next

 

• Samsung is expected to lift quarterly contract prices by 40-50 per cent for October-December, higher than the industry’s roughly 30 per cent rise, TrendForce analyst Ellie Wang said.

• “They are really confident that the price is going to increase. And the main reason is that now the demand is really strong, and everyone is working on long-term agreements with the suppliers,” she said, adding that these agreements will typically run into 2026 or 2026-2027.

 

(With agency inputs)