By Hyunjoo Jin and Fanny Potkin
SEOUL/SINGAPORE (Reuters) -Samsung Electronics this month raised prices of certain memory chips - now in short supply due to the global race to build AI data centres - by as much as 60% compared to September, two people with knowledge of the hikes said.
The move follows the world's biggest memory chipmaker's decision to delay a formal announcement of pricing for supply contracts in October, they said, adding that pricing details are typically announced each month.
Soaring
prices for these memory chips, which are mainly used in servers, are likely to add to stress for big companies building out data infrastructure. They also threaten to increase the costs of other products like smartphones and computers in which they are also used.
Many of the largest server makers and data center builders are "now accepting that they won't get nearly enough product. The price premiums being paid are extreme," Tobey Gonnerman, president of semiconductor distributor Fusion Worldwide, told Reuters.
The South Korean firm's contract prices for 32 gigabyte(GB) DDR5 memory chip modules jumped to $239 in November, up from $149 in September, he said.
DDR memory chips are used in servers, computers and other devices, assisting with computing performance by temporarily storing data and managing rapid data transfer and retrievals.
Samsung also lifted prices of 16GB DDR5 and 128GB DDR5 chips by about 50% to $135 and $1,194 respectively. Prices of 64GB DDR5 and 96GB DDR5 have gone up by more than 30%, Gonnerman said.
The price hikes were confirmed by another source who was briefed by Samsung. The source declined to be identified as the information is not public.
Samsung declined to comment.
The chip crunch has been so severe that it has spurred panic buying by some customers, according to industry executives and analysts.
China's top contract chipmaker SMIC said on Friday that the memory chip shortage has meant that customers are holding back orders for other types of chips that are also used in their products.
Xiaomi, a Chinese smartphone, electronics and auto manufacturer, also warned last month that the surging prices have raised the cost of making phones.
The shortage is, however, a boon for Samsung which has lagged rivals in offering advanced AI chips and had, until recently, not seen its profits climb nearly as much.
Its slower shift to AI chips has also meant Samsung has better pricing power than smaller rivals in memory like SK Hynix and Micron, according to Jeff Kim, head of research at KB Securities.
TrendForce analyst Ellie Wang said Samsung is likely to raise quarterly contract pricing by 40% to 50% in the October-December period, higher than the average 30% expected for the wider industry.
"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 those agreements are either for 2026 or 2026 and 2027 combined.
(Reporting by Hyunjoo Jin in Seoul and Fanny Potkin in Singapore; Editing by Miyoung Kim and Edwina Gibbs)
