Samsung’s memory products could be hit with a big price shock

Samsung is one of the world's top producers of NAND and DRAM memory. The company splits manufacturing between its plants in China and South Korea. Almost 40% of Samsung's total NAND output comes from its Xi'an plant in China.

As the threat of significant tariffs on semiconductor products looms large, the expected tariff regime could expose Samsung's memory products to a significant price shock.

NAND flash memory is used in a variety of consumer products, such as SSDs, memory cards, flash drives, and more. If the cost of the memory chip goes up then it's likely that the price of the product itself goes up.

Samsung is particularly exposed to this as it makes 40% of its total NAND output in China. A big chunk of those chips are exported to the United States as well. The US is expected to hit semiconductors with a 25% tariff next week. Based on some projections, NAND costs could rise by up to $15 per device.

Samsung has more protection on the DRAM front, the memory chips that go in smartphones, computers, wearble devices, game consoles, etc. All of its DRAM is produced in South Korea and it's insulated from any China-specific tariffs that may be announced next week, so the impact may be low.

It won't be good for rival SK Hynix, though, as almost of its DRAM production comes from its Wuxi plant in China. Analysts expect that DRAM and NAND prices could increase by up to 8% this year, but how that translates into price hikes for consumer products remains to be seen.