Flash memory customers accept 35% increase, Micron raises chip prices.

Morgan Stanley pointed out in the latest "AI Industry Tracker" report that storage manufacturer Phison has entered Nvidia's AI server supply chain. Its Re-timer products use PCI-E GEN 5 specifications, with a quotation of US$20-30 per unit. It is expected to be available next year. It will be officially adopted in the first half of the year. In addition, as NAND prices have hit bottom, Phison has seen increased demand from mainland module and smartphone customers, and some customers have even accepted price increases of 30% to 35%.

In addition, analyst Ming-Chi Kuo wrote that following Samsung's price increase in August, Micron has also begun to increase NAND Flash wafer contract prices by about 10% since September, which will help improve Micron's profits in the second half of the year.

Ming-Chi Kuo analyzed that in terms of DRAM, Micron is expected to benefit from three trends as early as 4Q23/1Q24, including Intel's new platform Meteor Lake accelerating the growth of DDR5 penetration, strong demand for AI servers boosting HBM shipments, and brand and processor Factory promotion of LLM on equipment is conducive to DDR/LPDDR specification upgrades.

In early August, there was news in the industry that Samsung had notified customers that it intended to increase the price of 512Gb NAND Flash wafers to US$1.60, an increase of about 15% from the price of US$1.40 in early 2023.

There are reports that domestic NAND Flash module manufacturers have also suspended quotations and order acceptance in August, and will increase quotations by 8 to 10% in line with the original manufacturer (Samsung). This move is expected to drive NAND Flash prices to gradually rise back to the manufacturing cost line.

On September 3, TrendForce market research agency reported that the recent NAND Flash spot market particle quotations have been driven by the news that wafer contract prices have successfully increased, and some items have seen relatively active inquiry demand.

According to TrendForce, the main reason was that NAND Flash original manufacturers further negotiated new wafer orders with some Chinese benchmark module manufacturers in late August, and successfully raised the 512Gb wafer contract price by about 10%. Other original manufacturers also followed suit. The price of products of the same level has been raised, indicating that the original manufacturers are unwilling to trade at low prices, thus driving the recent short-term rise in the wafer spot market.

Due to the price increase of NAND Flash wafers, which brings pressure to increase costs, module manufacturers have recently expressed their intention to increase their end products, mainly reflected in SSD products. Module manufacturers such as Kingston and Phison have recently returned to official prices. Transactions are no longer open to customers and can be negotiated at a low price.

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