On March 18, according to Bloomberg,Samsung Electronics is considering switching memory chip contracts to multi-year contracts, an arrangement that is much longer than usual to help stabilize supply and ease market concerns about shortages of such critical components.Samsung co-CEO Jun Young-hyun told shareholders at the annual shareholder meeting,The company is considering extending the contract to three to five years from the current quarterly or annual contract.He said that demand for AI memory chips is expected to continue to surge in 2026.
Samsung memory
Samsung's share price soared as much as 6.5% on the Korean Exchange today, rising for the third consecutive trading day and driving other group stocks higher. The stock prices of Samsung C&T and Samsung Life Insurance once soared 8.9% and 13% respectively.
Currently, SK Hynix, Samsung and Micron Technology jointly dominate the global supply of memory chips.In recent years, the three companies have shifted production to high-bandwidth memory dedicated to Nvidia's popular AI accelerators, leading to supply shortages of traditional memory chips.The shortage has begun to wreak havoc on corporate profits, disrupting company planning and driving up prices for everything from laptops to smartphones to cars and data centers. Many expect supply tensions to intensify further before conditions improve.
SK Group Chairman Chey Tae-won said this week that SK Hynix is preparing to introduce measures to stabilize prices, but did not disclose specific details.Choi Taiyuan said he expects the global memory supply shortage to continue for another four to five years due to inherent constraints in semiconductor production.