Samsung Electronics Co., the world’s top NAND flash maker, is expected to plan a double-digit price hike as early as this month.

The South Korean tech giant, which reduced NAND division in the second half of this year, is seeking to reverse this trend in the NAND business by promoting a price normalization strategy, in a move seen as an effort to restore profitability in the NAND sector.

According to multiple sources from the chip industry on Wednesday, Samsung Electronics is planning to proceed with a plan to increase contract prices for NAND products by over 10 percent in the fourth quarter of 2023, motivated by the assessment that NAND supply prices have been excessively low.

The increased prices are expected to be applied to new contracts as early as this month.

Samsung Electronics has been executing a reduction strategy since the first half of 2023 to cope with the worst chip downturn since the second half of last year.

In January, Samsung Electronics declared a practical reduction by naturally adjusting wafer input, and in April, it announced an intentional reduction policy by deliberately decreasing wafer input in the latter half of 2023.

The reduction scale has been expanding in the second half of this year.

Memory chips are split into the DRAM and NAND sections, with Samsung Electronics initially implementing reduction in the DRAM sector, followed by substantial reduction in the NAND sector in the latter of this year.

Price rebounds are being observed in the DRAM sector that underwent reduction earlier. However, the prices of NAND products still need a breakthrough.

Samsung Electronics aims to expand the reduction scale, reduce supply, and increase prices by double digits to find a reversal momentum.

The company is also seeking a transition to high-value-added next-generation markets.

Samsung Electronics aims to achieve the break-even point in the NAND sector in the second quarter of next year.

“Samsung Electronics’ second reduction and prioritized profitability policy seem likely to drive a rebound in memory prices,” SK Securities Co. researcher Han Dong-hee said.

By: DocMemory
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