Samsung Aims to Recover Profits in 2024 with NAND Flash Price Hike

After a rough 2023 marked by slumping demand and prices for chips, Samsung Electronics is gearing up for a profitable 2024. The company's memory chip business, a major source of income, is at the center of this strategy.

Last year proved challenging for Samsung's memory chip division. A global oversupply of NAND flash memory chips, a key component in smartphones, computers, and servers, led to a significant drop in both demand and prices. This resulted in the first-ever loss for the memory chip segment, directly impacting Samsung's overall profitability.

Looking ahead, Samsung is taking a proactive approach to improve its financial performance in 2024. The company is reportedly planning to raise NAND flash memory chip prices by 20%. Negotiations with clients in the mobile, PC, and server sectors are expected to take place in March and April. This price hike comes after a period of significant production cuts implemented by Samsung throughout the second half of 2023.

While Samsung holds a dominant position in the memory chip market, unlike DRAM (Dynamic Random-Access Memory) where only three major players exist, the NAND flash market is more diverse. Companies like Kioxia and Western Digital compete with Samsung, Micron, and SK Hynix. This larger pool of manufacturers makes it more challenging to enforce significant price increases.

However, the production cuts across the industry seem to be paying off. With supply levels under control, the trend of declining NAND flash prices has reversed. Analysts and securities agencies in South Korea are optimistic about Samsung's memory chip segment turning a profit in the first quarter of 2024. KB Securities, a South Korean investment firm, predicts Samsung's memory division to generate a profit of KRW 1.1 trillion (approximately USD 835 million) in Q1 2024.

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