Samsung Rises as DRAM Demand to Outpace Supply to 2026

Key Market Movements

Samsung shares experienced a 3% increase during Friday trading in Frankfurt following a report that projects a sustained imbalance between memory chip supply and demand. The forecast suggests that demand will continue to outpace supply through the year 2026.

Memory Chip Supply and Demand Overview

According to a report from Digitimes, the demand for DRAM is set to grow by 30% year-over-year. In contrast, Samsung plans to increase its DRAM bit output by only 5%, while the overall industry supply is projected to rise by 20%. This discrepancy creates a significant supply deficit in the market.

Impact on Pricing and the Broader Market

The persistent shortage is expected to result in substantial price increases across memory products. DRAM pricing is forecast to rise between 5% and 60% sequentially in the first quarter. Specifically, conventional DRAM used in PCs and smartphones could see price hikes of around 40%.

The NAND flash memory market is also facing shortages, although the supply gap is less severe than for DRAM. For the first quarter, average NAND pricing is estimated to increase by 35% to 38% quarter-over-quarter, affecting costs for a wide range of electronic devices.

Market Outlook Summary

The outlook suggests that the entire DRAM supply will remain sold out through 2026. This long-term trend points towards sustained upward pressure on prices for memory components, impacting manufacturing costs and potentially consumer prices for electronics globally. Market watchers will be closely monitoring supply chain adjustments and capital expenditure from major producers like Samsung.

FAQ

Q: Why did Samsung's shares increase?
A: The shares rose following a report indicating that strong demand for DRAM memory chips will significantly exceed supply through 2026, which is expected to drive up prices and profitability.

Q: How much are memory chip prices expected to rise?
A: In the first quarter, DRAM prices are projected to increase by 5% to 60% sequentially, while NAND flash memory prices are estimated to rise by 35% to 38% over the previous quarter.

Source: Investing.com