South Korea’s leading memory players, once hesitant to commit to long-term agreements during periods of tight supply, now appear to be shifting direction. According to Bloomberg, citing comments from Co-CEO Jun Young-hyun at the March 18 shareholder meeting, Samsung is evaluating multi-year memory contracts to ensure more stable supply and reduce concerns over potential shortages.
Specifically, Samsung is considering extending contract durations from the usual quarterly or annual terms to as long as three to five years. This move comes as demand for AI-driven memory chips is expected to remain strong through 2026.
Market observers, as cited by Global Economic, note that adopting long-term contracts could provide chipmakers with more predictable revenue streams. However, this approach may also limit flexibility when memory prices decline. In past downturns, prices typically dropped sharply, helping reduce costs for customers. Widespread use of long-term agreements could weaken that effect.
At the same time, Samsung appears to be preparing for future market cycles. Beyond exploring longer-term deals, the company is reportedly assessing the risk of a global memory market downturn as early as 2028. While capitalizing on the AI boom to drive profits, it is also tightening operational discipline to avoid another period of oversupply.
This shift is particularly notable compared to earlier behavior. According to Hankyung, in January, Samsung and SK hynix proposed raising server DRAM prices by 60-70% quarter-over-quarter to major clients such as Microsoft and Google, yet still declined to enter multi-year agreements, opting to maintain quarterly contracts instead.
In parallel, Bloomberg reports that SK Group Chairman Chey Tae-won has hinted at upcoming measures aimed at stabilizing memory prices, though details remain unclear. Reuters also notes his warning that the global semiconductor wafer shortage could persist until 2030, with supply gaps potentially exceeding 20% as AI-driven demand continues to outpace supply.
Meanwhile, Micron, which is set to report earnings on March 18 (U.S. time), is gaining analyst confidence thanks to progress in next-generation HBM4 and improved visibility around long-term agreements with customers.
