Samsung reportedly raises memory chip prices by 60% amid global AI demand — will the hike impact customers?

Samsung Electronics increased memory chip prices this month by up to 60% from September amid a global shortage driven by rising AI demand. According to a report by , this price increase is affecting server manufacturers and could increase the costs of smartphones and computers. Reutersquoting people familiar with the development.

Following the development, shares of Samsung, SK Hynix and US chip manufacturers rose; This highlighted how the AI boom is driving strong demand for chips specifically designed for AI applications and the memory chips used in them.

The report stated that the price increase came after Samsung, the world’s largest memory chip maker, decided to postpone the official pricing announcement for supply contracts in October. Pricing details are typically announced monthly.

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Will the price increase affect customers?

Rising prices of these memory chips, used mainly in servers, are expected to put pressure on large companies that build data infrastructures. They are also likely to increase prices of other products that may affect customers, such as smartphones and computers that use these chips.

increasing costs

Many leading server manufacturers and data center developers admit they are no longer getting enough supply. Tobey Gonnerman, president of semiconductor distributor Fusion Worldwide, said the prices paid as premiums are too high. Reuters.

Samsung said contract prices for 32 gigabyte (GB) DDR5 memory chip modules rose to $239 in November from $149 in September.

DDR memory chips are used in servers, computers, and other devices to increase computing performance by temporarily storing data and facilitating fast data transfer and retrieval.

The South Korean company increased the prices of its 16 GB DDR5 and 128 GB DDR5 chips by nearly 50%, to $135 and $1,194, respectively. Gonnerman said that prices for 64 GB DDR5 and 96 GB DDR5 have increased by over 30%.

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Samsung has not shared any official updates regarding the reported price increases. live mint could not independently verify the report.

Samsung on Sunday announced plans to build a new chip production line at its facility in South Korea, predicting that artificial intelligence will drive demand in the medium and long term.

The report, based on industry executives and analysts, stated that the chip shortage was so intense that it caused panic among some customers.

Chinese smartphone maker Xiaomi warned last month that rising prices were increasing the cost of producing phones.

But this shortfall benefits Samsung, which has lagged behind its rivals in providing advanced AI chips and has not experienced much profit growth until recently.

Samsung’s gradual shift to AI chips gives it stronger pricing power compared to smaller memory rivals such as SK Hynix and Micron, the report said, citing Jeff Kim, head of research at KB Securities.

Samsung will likely increase quarterly contract prices by 40% to 50% in October-December, exceeding the expected industry average of 30%, TrendForce analyst Ellie Wang told the news portal.

“They’re really confident that the price will go up. The main reason for that is demand is really strong now and everyone is working on long-term deals with suppliers,” he said.