It is reported that the foundry side plans to conduct a comprehensive price increase again in the first quarter of 2022. The price increase this time is between 5% and 10%, which is slightly lower than the average increase of more than 20% last year. If this price increase is successful and the final increase is close to the upper limit of 10%, it is enough to show that the customer has a strong demand for wafers, otherwise it can prove that the customer‘s demand is not strong, so as to adjust for future capacity allocation. Since the outbreak of COVID-19, the shortage of cores has led to a general increase in the foundry side. Among them, TSMC, a leading company in the industry that does not easily increase prices, announced in just 5 days from March 29 to April 3, 2021. 3 different price hikes. Entering 2022, this price increase is more of a phenomenon to test the limit of foundry prices, full of tentative implications for the foundry market, and it is also a self-adjustment of the market. Subsequent foundry market prices will stabilize. However, in the flash memory market where prices should not be raised, Samsung seems to want to go the way of "wafer foundry" and support the entire flash memory market price by itself. According to media reports, Samsung is considering raising the price of its own-brand SSDs. The report did not provide numbers or percentages for the expected price increase, but also noted that Samsung appears to be heading in the opposite direction of other SSD suppliers. After facing lower-than-expected demand, Samsung‘s rivals are expected to lower overall pricing by as much as 10 percent in an attempt to increase the appeal of their products. Samsung recently cut production guidance for its two NAND factories in Xi‘an, China, which are responsible for about 40% of Samsung‘s global NAND production, and they also account for about 15% of global NAND production by calculation. There are reasons for epidemic prevention and control, and there are also reasons why market demand is lower than expected. In the face of insufficient market expectations, it proactively reduced production and planned to increase prices. There is no problem in cutting production, and it is estimated that friends and businessmen are stunned by the planned price increase.

Does the "friend business" follow or not?

The first thing you should ask is whether Samsung has the strength to leverage the market. According to the data of the NAND flash memory market in the first quarter of 2021, Samsung Electronics’ revenue from NAND flash memory products in the first quarter of 2021 was US$4.97 billion, a quarterly increase of 7%. . Its share in the global NAND flash memory market was 33.5%, with a quarterly increase of 0.6%, securing a leading position. The other major suppliers are: Kioxia, Western Digital, SK Hynix, Micron, Intel, etc., with market shares ranging from 7.5% to 18.7%.

Taken together, Samsung accounts for about one-third of the NAND flash memory market and has the ability to leverage market prices. On the other hand, according to data from market research agency TrendForce, Samsung Electronics‘ NAND flash average selling price (ASP) fell by 5% in the first quarter of 2021 alone due to oversupply in the market. That is to say, Samsung’s price has already fallen in 2021, and the magnitude of the price increase plan Samsung has thrown out this time is likely to be only a small adjustment, returning to the level before the price cut in early 2021. This time, the price increase plan was thrown out instead of directly raising the price. It should be a dialogue with the "friends", indicating the intention of raising the price, and we will see whether the "friends" will reduce production and follow up. After all, after several months of bargain-hunting competition, they are exhausted.