Price hikes are continuing throughout the semiconductor supply chain. Following raw materials, wafers, and packaging components, power semiconductor manufacturers with relatively lower technical complexity are also raising product prices. The surge in demand for AI (artificial intelligence) data centers combined with rising costs is driving price increase trends across the entire industry, extending beyond memory semiconductors.
According to industry sources on the 27th, U.S. power semiconductor company ON Semiconductor recently notified customers of a broad-based price increase across its product lineup starting next month from the 10th. ON Semiconductor primarily supplies semiconductors that efficiently convert and control power, as well as image sensors. Recently, it has been expanding its business scope into AI data centers and physical AI-related products.
ON Semiconductor cited rising costs for raw materials, manufacturing, energy, and infrastructure, along with increased demand for semiconductors used in power, industrial, and data center applications, as reasons for the price hike. Renesas, a Japanese automotive semiconductor company that had previously announced a price increase for next year, explained that "the global semiconductor industry is facing structural cost pressures in areas such as raw materials, energy, advanced packaging, production capacity, and logistics."
Materials used in semiconductor manufacturing are also showing signs of price increases. According to Taiwanese media, silicon wafer prices for all sizes are expected to rise by at least 10% within three years. In addition, prices for gases and chemicals required during the semiconductor manufacturing process, as well as packaging products that protect semiconductors from external shocks and moisture, are fluctuating.
As investment in AI data centers expands, demand for semiconductors and related materials and components is increasing, spreading price hike trends to power semiconductors, MLCCs (multilayer ceramic capacitors), and industrial gases. Even semiconductor supply chain companies at the upstream and downstream ends, which have received relatively less attention, are gaining leverage in price negotiations with customers.
DRAM prices, which surged consecutively, continue to rise steadily. Despite discussions about slowing AI growth, as of the 21st, the spot transaction price for general-purpose DDR5 (Double Data Rate 5) 16Gb (gigabit) products reached a record high of $56.933. Prices rose by 5.6% this month alone. Compared to early this year, prices have approximately doubled.
Price increase decisions in the semiconductor industry could benefit Samsung Electronics and SK Hynix. While price hikes for wafers and packaging materials may pose a burden, current profit margins are high enough to offset them. Instead, the "domino effect of price increases" could serve as direct evidence of the tight semiconductor supply and demand situation.
Analyses also suggest that the sharp price increase in DRAM has not yet been fully reflected in HBM (high-bandwidth memory) prices. Further price hikes for HBM are expected. According to JPMorgan, HBM supply is projected to remain 19% below demand next year as well, continuing a shortage situation.
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