After a long period of inventory adjustment and price reduction, semiconductor giants finally rushed to the node in December and issued price increase letters one after another, confirming that there will be a price increase in the first quarter of 2024. In this round of price hikes, Western Digital, Samsung, Dongyou Precision Chemicals, and ADI have all increased their prices by more than 10%.

Samsung CIS raises prices by up to 30%

In early December, according to Taiwan's Economic Daily News, Samsung has issued a CIS price increase notice to customers, expecting an average increase of 25% in the first quarter of next year, with some product lines even experiencing a maximum increase of 30%. The product range mainly includes specifications above 32 million pixels, indicating that the CIS component market is expected to usher in a wave of price increases in the future.

The CIS component market was previously affected by sluggish consumer market demand, which in turn impacted market prices, making CIS components one of the first groups affected by price declines.

However, after entering the second half of this year, due to the comprehensive recovery of demand in the smartphone market, brand factories have adjusted their inventory to a near healthy level OPPO、vivo、 Major brands such as Xiaomi and Huawei have begun to vigorously promote inventory, becoming the main driving force for this wave of inventory replenishment, significantly reducing the CIS inventory level.

Western Data's maximum price increase is 50%

On December 7th, Western Digital, the world's fourth largest storage NAND Flash supplier, issued a price increase notice to customers, stating that the company's hard drive products will adopt weekly review pricing and are expected to increase prices in the first half of next year; Among them, HDD will review prices on a weekly basis and dynamically adjust prices until the first half of next year, while Flash will also adopt a periodic price increase approach in the coming quarters; As for the NAND chip part, Western Digital expects prices to rise periodically in the coming quarters, with a cumulative increase of more than 50% higher than the current quotation, reaching 55%.

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Source: Flash Memory Market

Western Digital pointed out that due to the company's current efforts to regulate its production capacity in response to market supply and demand environment, it is difficult to immediately respond to unplanned demands and orders. Therefore, customers are requested to review their order status again and contact the company as soon as possible to arrange.

The NAND chip market has weakened since the second half of 2022, with prices plummeting and related manufacturers facing operational difficulties. With significant production cuts by benchmark manufacturers such as Samsung, Kaixia, SK Hynix, Western Digital, and Micron, coupled with a resurgence in demand for terminal applications such as smartphones, the NAND chip market has experienced a downturn.

According to statistics, Samsung will dominate the global NAND chip market in 2022, followed by Kaixia and SK Hynix in third place; Western Data ranks fourth with a market share of approximately 12.7%.

Dongyou Precision Chemical plans to raise prices by up to 20%

On December 11th, according to the South Korean media "The Elec", industry insiders revealed that Dongyou Precision Chemical, a subsidiary of Sumitomo Chemical in Japan, has announced to South Korean semiconductor companies that it plans to increase the prices of krypton fluoride (KrF) and L-line photoresist due to rising raw material and labor costs, with an increase rate of about 10% -20% depending on the product.

But South Korean semiconductor companies expressed dissatisfaction with the price increase. Industry insiders in the foundry industry have stated that "if the price of photoresist rises, foundries have no choice but to pass on a portion to customers (fabless factories)," and added that "the price increase of Dongyou Precision Chemical photoresist may lead to a decline in the profitability of foundries and the entire fabless industry

But this price transmission is obviously not as smooth as expected. An industry insider in the semiconductor raw materials industry in South Korea said, "Since the downturn in the semiconductor industry in the second half of last year, customers have been constantly demanding further price reductions from upstream material manufacturers. Small and medium-sized enterprises with low price negotiation ability are in a difficult period

ADI reportedly raises prices by up to 20%

On December 26th, the market leaked the latest price increase letter issued by American analog chip giant ADI to its distributors.

According to the price increase letter released by ADI, the official will selectively raise prices in response to the incremental costs brought by ADI's old product production. The price increase will take effect on February 4, 2024. ADI can help support the search for new alternative products in response to customer inquiries about price increases. In order to sustainably maintain the supply guarantee of old materials for customers, we will increase the prices of some old material products to offset the incremental costs incurred by us in maintaining the production of these old-fashioned parts

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Source: Social media, subject to official announcement

According to internal sources, the increase this time is between 10% and 20%, including new orders and existing booking demands. They also distinguish products produced at different time periods, such as a 20-year increase of about 15% in production, and a 25-30 year increase of about 20% in production, but this news still needs to be officially verified.

At the ADI performance briefing in November, Morgan Stanley asked if ADI's revenue decline and market downturn would lower prices. ADI's CEO and Chairman of the Board responded, "The company's new product design wins and more mature product business continue to grow month on month. I am confident in the pricing we have managed to increase in the past few years (2.5 years), as they will reflect the increased costs. We will maintain these prices. Overall, we are optimistic about our current situation and future pricing environment