According to Taiwanese media Digitimes, AI demand has exploded, and memory manufacturers are welcoming a "full price increase" boom. Micron's recent financial report released good results and growth prospects, and the memory supply chain received a letter from Micron notifying of price increases.

Under the tight supply and demand of production capacity, Micron is optimistic that the growth of the memory industry will continue from 2025 to 2026, so it has raised quotations for all product areas.

Memory Supply Link received a price increase explanation and memo signed by Micron's Executive Vice President of Sales Mike Cordano

Details about the Price

It is pointed out that this wave is not only aimed at channel spot prices, but also includes contract price orders that have not yet completed price negotiations. They will also be raised from the price increase date, and if demand exceeds the forecast or allocation, Micron may raise prices again or charge a surcharge for urgent orders.

Memory module manufacturers have observed that from the first quarter of 2025, the overall memory inventory has improved significantly. It was originally expected that prices will recover from the second quarter. Micron previously released its intention to raise DRAM and NAND Flash prices from the second quarter.

In the past 10 years, memory manufacturers have rarely proposed comprehensive price increases. It is obvious that the memory industry will officially enter the seller's market from the second quarter. The driving force of AI application demand has allowed the memory industry to break away from the traditional cyclical cycle model.

Although SanDisk took the lead in sending a letter to fire the first shot of price increases, the supply chain revealed that although other manufacturers have not officially sent letters, price increases have already begun quietly.

Taking NAND prices as an example, wafers and components have been raised twice, with the increase exceeding 15%, and some items have exceeded 20%.

Rarely, in the past, the price increase was quoted by the original factory's official price first, and then adjusted according to the response. Recently, the official price was adjusted directly first, and then the bargaining power of each company was discussed. Now that Micron has sent a letter to the agent, it is expected that Korean memory manufacturers will quickly follow up with price increases.

Although Micron did not specify the specific price increase range and date in the letter, it is mainly because the comprehensive price increase involves different items and applications, and many details are still to be further confirmed, but the supply chain expects that price increases will be fully promoted from the second quarter.

According to the price increase explanation and memorandum signed by Mike Cordano, Executive Vice President of Sales of Micron, the industry received, the content mentioned that the memory and storage device market has begun to recover as the market dynamics change. Micron expects this wave of growth to continue until 2025~2026. Due to the recent unexpected demand growth in various business areas, Micron has decided to increase product prices in the face of tight supply and demand.

Especially due to the rapid increase in demand for AI-related applications and technologies, the outside world is increasingly interested in Micron's product portfolio, and the key technical capabilities of related products are very important. Micron will adjust its pricing strategy based on the value of the product and the return on investment.

02 Others' thought about the raising

The industry revealed that Micron will not accept additional orders for this wave of price increases. The rare part is that all orders that have not yet been delivered will be automatically updated after the new price takes effect. In the past, server manufacturers mostly took orders first and confirmed that they could run before invoicing, so whether the price increase covers the contract price and server memory remains to be observed.

In addition, the discount validity period for large-scale mass production or old production lines will also be shortened. If the order does not obtain the confirmed material availability date, the shipment may be delayed or not guaranteed. However, if the delivery period exceeds 45 days and is not confirmed, Micron may also cancel the order.

From all indications, the current production capacity supply of some items is insufficient, and even if there are orders, they will not be delivered in the end.

In order to maintain stable supply and respond to market demand, Micron also calls on customers and channel operators to provide longer-term demand forecasts and backlog order information to help arrange production capacity.

However, according to the supply chain, Micron proposed several price increase conditions and reservations this time, which shows that this wave of strong price increases is full of confidence.

Source: Content from digitimes

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