In response to complaints from mobile phone manufacturers, regulatory authorities have started to closely monitor the memory chip market, which has seen a six-quarter price increase and is expected to continue rising in the first quarter of next year. On December 21, sources told the 21st Century Business Herald that the National Development and Reform Commission (NDRC) has already discussed Samsung regarding this issue. However, it remains unclear whether an anti-monopoly investigation will be launched.
Samsung is the world’s largest producer of memory chips, holding approximately 48% of the DRAM market and 35.4% of the NAND Flash market. These two types of chips are essential components in smartphones, computers, and servers. According to China Flash Memory Market (CFM), the global storage chip market reached $950 billion in 2017, with DRAM valued at around $50.35 billion and NAND at about $40 billion.
The price hike for memory chips began in Q3 2016 due to supply shortages, leading to increased costs for smartphones, solid-state drives, and memory modules. Popular phones saw price increases of 100–200 yuan, while flagship models were priced up to 300 yuan higher than previous versions. Some memory modules even experienced a 300% price surge within a year.
Many analysts had predicted that the price rise would end by mid-2017, but the trend has persisted, with price reductions now expected to occur as late as the second half of 2018.
"Storage has surpassed the screen and CPU as the biggest cost in smartphones," said one mobile phone manufacturer. "The cost of storage in phones now accounts for 25%–35%, and smaller manufacturers have no say in pricing." The price of flash memory has risen by more than 30%–40% this year, with some sources noting that 32GB and 64GB flash memory prices increased by $5 and $10 respectively, while 128GB units rose by $20—creating significant pressure on manufacturers.
Only a few global suppliers dominate the market: Samsung, Micron, Toshiba, Hynix, and Western Digital. Together, Samsung, Micron, and Hynix control over 90% of the DRAM market.
These high profits have translated into massive earnings for the chip giants. In Q3 2017, Samsung reported revenue of $54.5 billion, a 29.7% increase year-on-year, with net profit reaching $12.76 billion—a 179.47% jump. For the first three quarters of 2017, Samsung’s total revenue was $152.456 billion, up 16.8% from the same period in 2016, and net profit reached $33.81 billion, a 92.3% increase. While its mobile business suffered due to the battery recall scandal, semiconductors became Samsung’s main source of profit.
In Q2 2017, Samsung’s semiconductor division generated $15.73 billion in revenue, surpassing Intel’s $14.776 billion and making Samsung the world’s largest chipmaker. Since June 2016, Samsung’s stock price has surged from 1.33 million won to 2.554 million won, a 90% increase. By November 2017, the stock hit a 10-year high of 2.86 million won.
According to industry reports, Samsung and Hynix have announced plans to raise DRAM prices by 3%–5% in the first quarter of next year, signaling continued price increases in storage products.
As the world's largest electronics producer and consumer, China has become a major market affected by these price hikes. However, PC and smartphone manufacturers have little bargaining power against the dominant chip suppliers. Even Foxconn, known for its supply chain efficiency, struggles to manage rising costs. A Foxconn source noted, “The market is clearly saturated. At the beginning of the year, we couldn’t buy products even if we had money. Now we can buy them, but at much higher prices.â€
Industry insiders suspect a price cartel among the major players. This pattern was seen in 2000, when companies like Samsung, Hynix, and Micron were fined $730 million by the U.S. Department of Justice for price-fixing—then the second-largest antitrust penalty in U.S. history.
During the early 2000s, the global PC market shrank, and DRAM prices plummeted. But after the market failed to recover, prices rebounded sharply, increasing by over 300% in six months. Companies like Dell, HP, Apple, and IBM faced heavy cost pressures, prompting the U.S. government to investigate. In 2002, the DOJ summoned several firms, including Samsung, Hynix, and Micron, for price monopoly. Eventually, Samsung paid $300 million, Hynix $185 million, Infineon $160 million, and Elpida $84 million.
Although it's unclear if regulators will launch an investigation into current price trends, the possibility of collusion remains a concern. Such behavior not only allows companies to inflate prices but also helps eliminate competitors. With the ongoing price hikes, Samsung and other chip giants are accumulating substantial cash flow. As Chinese companies enter the memory market, they will likely face fierce competition from established players like Samsung and Micron.
Usb3.1 Data Cables,Male To Male Usb Cable,Usb Extension Line,Usb 3.0 Cable
ShenZhen Puchen Electronics Co., Ltd. , https://www.szpuchen.com