"Storage shortage" intensifies! Samsung HBM4 reportedly raises prices by 30%, South Korea's "chip duo" actively expanding production

Source: Caixin News Agency Author: Bian Chun

On Thursday, South Korea’s memory chip giant Samsung Electronics’ stock price hit a new all-time high again. Previously, there were reports that the company was negotiating the pricing of its latest generation artificial intelligence (AI) storage chips, with prices up to 30% higher than the previous generation.

Samsung’s stock price rose more than 5 intraday, reaching a record high of 190,900 won. Since the beginning of the year, Samsung’s stock has increased nearly 50%, continuing its rapid rise into 2025.

Meanwhile, led by the storage sector, the South Korean stock market hit new highs again on Thursday, with the benchmark Kospi index reaching a intraday high of 5,681.65 points. By the close, it had risen over 3%.

Reports indicate that Samsung plans to set the price of its HBM4 components at around $700, which is 20% to 30% higher than HBM3E.

Saxo Markets Chief Investment Strategist Charu Chanana said that the reports about Samsung HBM4 again highlight the industry’s “pricing power.”

“This indicates that the supply of AI storage chips remains tight, and Samsung believes it has regained some pricing power in the high-end (chip) market,” she said.

The ongoing shortage of storage chips continues to benefit Samsung and its domestic competitor SK Hynix, driving the Kospi index up 34% year-to-date, making it the best-performing stock market globally.

After initially lagging behind SK Hynix in the AI race, Samsung is now making a strong comeback. Just last week, Samsung announced it has begun mass production of HBM4 chips and has delivered commercial products to customers.

The report also states that SK Hynix is expected to set a higher price for HBM4 as well. Last August, the company supplied Nvidia with HBM4 at about $500 per unit.

Bloomberg Intelligence analyst Masahiro Wakasugi wrote in a report that a $700 price point implies Samsung HBM4’s operating profit margin could reach 50% to 60%.

“If Samsung supplies more HBM chips to Nvidia, the average selling price gap between Samsung and SK Hynix in 2026 will narrow, because the pricing for chips aimed at Nvidia will be higher than for other customers,” he said.

South Korea’s “chip duopoly” adjusts strategies to expand production actively

Meanwhile, facing surging demand for memory chips driven by AI, South Korea’s “chip duopoly”—Samsung Electronics and SK Hynix—are adjusting their strategies: proactively advancing production plans to seize the benefits of the memory super cycle.

Until the end of last year, these companies were cautiously controlling capacity expansion, learning from past lessons of vicious price wars among memory chip manufacturers. Now, with the memory market continuing to prosper, they are shifting toward active expansion.

According to the latest reports, SK Hynix plans to bring forward the trial operation of its Yongin Phase 1 wafer fab to February-March next year, originally scheduled for completion in May next year.

Samsung Electronics will also move up the commissioning of its Pyeongtaek P4 plant from the first quarter of next year to the fourth quarter of this year, advancing production plans by about three months.

Both companies will focus on deploying high-value-added products on new production lines, such as high-performance DRAM and HBM (High Bandwidth Memory).

The strategic adjustments by Samsung and SK Hynix are driven by the significant increase in demand for high-performance DRAM fueled by AI data center construction.

Currently, the supply of storage chips continues to lag behind demand.

Korea’s KB Securities pointed out: “As of February, compared to the fourth quarter of last year, the shortage of memory chips has further intensified, with key customers’ order fulfillment rate at only 60%. AI data center companies account for 70% of Samsung’s memory shipments.”

Citigroup analysts noted that this year, DRAM supply is expected to grow by 17.5%, and NAND flash memory supply by 16.5%. Meanwhile, demand for DRAM is projected to increase by 20.1%, and NAND flash memory demand by 21.4%, indicating that demand growth continues to outpace supply.

Mainstream market research firms such as Morningstar and JPMorgan Chase all forecast that the shortage of storage chips will persist until 2027.