Amid the imbalance between supply and demand in the memory chip market, Samsung Electronics is adopting a long-term contract strategy to lock in customers. According to reports,Samsung is negotiating three- to five-year fixed supply contracts with major customers, using small discounts from the current market price as bait in exchange for long-term demand commitments, trying to extend the dividends of this DRAM price increase cycle as much as possible.
Samsung Electronics CEO Jun Young-hyun made it clear: "We are working with core customers to shift the trading model to fixed-term supply contracts. By identifying market fluctuations in advance, we can flexibly adjust the scale of investment."
This stance is in sharp contrast to its stance a few months ago, when Samsung had no time to even consider quarterly contracts, but now it is offering multi-year long-term contracts.
By locking customers into long-term contracts of three to five years, Samsung can still maintain high and stable revenue through contracts, even if the storage market demand declines or overcapacity causes prices to collapse in the future.
This is not good news for consumers. Once mainstream production capacity is divided up by these long-term contracts, the DRAM price increase cycle originally expected to end in 2027 to 2028 is likely to be further prolonged.
