"Next Year's Memory Market Seen at $800 Billion" ... Will Samsung and SK Gain More Pricing Power?

[Financial News] As the AI memory upcycle spreads beyond high-bandwidth memory (HBM) to mainstream DRAM and NAND, Samsung Electronics and SK hynix are expected to gain stronger pricing power. With memory demand rising on the back of the expanding AI inference market and prices for mainstream memory continuing to climb, the semiconductor industry as a whole is also seeing growing expectations for improved profitability, as foundry makers begin to move toward price increases as well.
According to industry sources on the 28th, Taiwanese DRAM maker Nanya Technology expects both the size of the memory market and profitability to grow in tandem, driven by the expansion of the AI inference market.
Joseph Wu, senior vice president at Nanya Technology, recently forecast that as the AI inference market enters a full-fledged growth phase, the global memory market, including DRAM and NAND, will expand to about $800 billion next year. He also projected that the share of semiconductor industry profits generated by the memory segment will rise to around 50% this year, far above the historical average of 30%.
Nanya Technology said the structure of memory demand is changing as the AI industry shifts from training to inference. It explained that demand for AI memory, which had centered on HBM, is now expanding to server DRAM and mainstream memory, further strengthening the industry's pricing power.
The amount of memory required per AI server is also rising rapidly. Nanya Technology expects the spread of AI inference services to keep increasing the amount of high-capacity DRAM installed on single central processing unit (CPU) platforms. It said HBM and server DRAM currently account for more than half of total DRAM demand, and that share is expected to rise above 60% in the future.
This outlook for stronger demand is also expected to support higher prices for mainstream memory. Daishin Securities projected that global mainstream DRAM prices will rise by the low- to mid-20% range quarter on quarter in the third and fourth quarters of this year, while NAND prices will increase by the mid- to high-teens range. The analysis suggests that suppliers' customized supply controls and pricing strategies will once again prove effective in the market.
Industry watchers say the rise in mainstream memory prices will also help improve earnings at Samsung Electronics and SK hynix. Since both companies have large exposure not only to HBM but also to mainstream DRAM and NAND, higher average selling prices are likely to translate into better profitability. In particular, as the benefits of AI investment spread beyond HBM, unlike the earlier trend that was concentrated there, expectations are growing that profitability across the memory business will improve as well.
Meanwhile, price increases are also being considered in the foundry sector, not just in memory. TSMC, the world's largest foundry company, is reportedly reviewing plans to raise prices for advanced and mature process nodes by up to 10% starting next year. Price hikes of around 5% to 10% are said to be under discussion by product category. With a simultaneous push for higher prices in both memory and foundry businesses, the semiconductor industry is expected to have stronger pricing power than in the past.
[email protected] Lee Dong-hyeok Reporter