Technology companies are currently sending more employees to South Korea to negotiate with memory chip suppliers. Technology companies here are not only Google and Microsoft, but also larger smartphone manufacturers. These companies all need a large number of different types of memory chips. According to news released by the Business Insider website, Microsoft, Google and Meta have all sent procurement executives to South Korea to negotiate with Samsung and SK Hynix in the hope of obtaining more memory chip supplies. Now it is no longer a question of price but a serious supply imbalance.
Hyperscale data center operators such as Google and Microsoft require HBM series high-bandwidth memory chips for the production of artificial intelligence accelerator cards. If there are not enough memory chips, Google will not be able to produce more of its customized TPU accelerators.
According to reports, Microsoft executives recently visited SK Hynix's headquarters to discuss a new long-term agreement focusing on memory products. However, SK Hynix seemed to maintain a strong position, saying that it was difficult to supply memory products under the conditions proposed by Microsoft, and Microsoft executives left the meeting angrily.
However, these anecdotes from Microsoft seem trivial compared to Google, because Google directly fired the procurement director in order to punish him, on the grounds that the procurement director lacked foresight and did not sign an agreement with the memory chip supplier in advance, and he was personally responsible for this.
The current rumor is that the conditions proposed by large technology companies such as Google, Microsoft, Meta, etc. are to accept any price but need to place memory-related orders with no supply cap, but SK Hynix and Micron have made clear impossible responses to requests to increase the supply of HBM chips.
Apple is also affected by memory chip supply problems. Apple's long-term agreement with major memory chip suppliers will also expire in January next year. By then, Apple will also need to pay a premium of up to 230% for LPDDR5X memory chips, and the prices of related products may also increase accordingly.