As demand for memory semiconductors begins to rebound, Micron, a leading U.S. manufacturer of DRAM, has announced a price increase. This move is attributed to the supply of general-purpose memory, which had been controlled, being depleted as demand related to artificial intelligence (AI) exceeded expectations. In the global DRAM market, where three companies have established a monopoly, it is common for other suppliers to follow suit when one company raises prices. The industry expects Samsung Electronics and SK hynix to also soon join the price increase.
According to industry sources on the 27th, Micron notified clients and distribution partners on the 25th of a price increase for all memory semiconductors. Micron Executive Vice President of Global Sales Mike Cordano noted in a letter to partners, "The memory and storage market has started to recover recently, and growth is expected to continue into next year. Demand is appearing higher than predicted across various business sectors, prompting Micron to respond to market changes by raising prices."
Cordano stated, "With increasing demand for AI use cases and related technologies, memory demand is rising. Micron will continue to price taking both demand and return on investment into consideration." Although the specific rate of increase was not disclosed, the industry expects Micron to raise prices by up to 11%.
With Micron formalizing its price increase, the supply and demand of memory have recently shown improvement. Previously, the memory market experienced declining prices due to excessive supply, weak demand, and accumulating inventories. However, concerns over U.S.-imposed tariffs have led finished goods companies like mobile and PC manufacturers to increase memory procurement, prompting a demand rebound, aided by memory manufacturers controlling supply and causing prices to rise. NAND flash suppliers have already announced plans to raise prices starting next month, in anticipation of these changes. Market research firm TrendForce forecasts an average DRAM price increase of 3–8% and a NAND flash average price increase of 10–15% in the second quarter of this year.
Micron's signal of a price hike suggests it's only a matter of time before Samsung Electronics and SK hynix follow suit by raising their DRAM prices, according to analysis. MERITZ Securities noted, "In this period, DRAM suppliers are adhering to a conservative investment stance, choosing price over volume. At this point, no so-called 'betrayer' is visible." The expectation is that Samsung Electronics and SK hynix will also align with Micron's DRAM price increase trend.
Lee Min-hee, a researcher at BNK Securities, also noted, "With the expansion of high bandwidth memory (HBM) facilities, the production of general DRAM is constrained within the three major DRAM companies, which is expected to result in a higher overall DRAM demand growth rate compared to the production growth rate this year. Samsung Electronics, primarily, has significantly reduced its general memory production plans, causing anxiety among clients."
At a shareholder meeting held on this day, SK hynix hinted at the possibility of a price increase while mentioning "flexible responses." Lee Sang-Rak, Executive Vice President of Global Sales and Marketing at SK hynix, explained in response to shareholders' questions about the "impact of Micron's DRAM price increase," saying, "We saw the letter Micron sent to channel partners yesterday. We haven't sent any such letters to our clients, and we always aim to respond flexibly."
He continued, "Last year's accumulated inventories from customers are being significantly consumed, and suppliers' sales inventories have also decreased. However, it remains to be seen whether the current market trend is short-term or long-term."