Samsung weighs multi-year deals to ease chip shortage fears

Samsung is weighing multi-year memory chip contracts of three to five years to stabilise supply and ease shortage fears, co-CEO Jun Young-hyun said.

Shares rose as much as 6.5% on the Korea Exchange, while Samsung C&T and Samsung Life Insurance climbed 8.9% and 13%, respectively, after the announcement.

SK Hynix, Samsung, and Micron dominate global memory supply and have shifted production toward specialised memory used in Nvidia’s AI accelerators, creating a shortfall in conventional storage.

That deficit is squeezing profits, disrupting corporate plans, and lifting prices for products from laptops to data centers.

🔗 Source: Bloomberg

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A zero-sum shift in wafer capacity is forcing Samsung’s hand

Memory makers are steering wafer capacity toward high-margin AI memory such as High Bandwidth Memory (HBM). That creates a zero-sum squeeze, since more AI output means less conventional DRAM (dynamic random-access memory) and fewer components for consumer devices 1.
As a result, standard memory pricing has jumped. Contract prices for a type of DRAM chip rose 313% in the fourth quarter versus a year earlier, based on TrendForce (a market research firm that tracks electronics component pricing) data cited in a Reuters report 2.
Samsung views the AI cycle as an opening to win back market leadership. Co-CEO Jun Young-hyun said customers gave positive feedback on the company’s next-generation HBM4 memory in a New Year message 3.

Phones and laptops may cost more as AI draws memory supply away

The shortage will likely weigh on smartphone and PC markets. IDC (International Data Corporation, a technology market research firm) laid out downside cases where PC vendors signal 15–20% price hikes and reopen contracts as costs climb 1.
PC vendors still need to hit the 16GB minimum RAM (random access memory) required for Microsoft’s Copilot+ PCs. Smartphone makers may raise prices, trim specs, or skip RAM upgrades on new models 1.
Other products face knock-on effects. Cisco cited the tighter memory market when it issued a weak profit outlook, while Sony is weighing a delay of its next PlayStation console debut to 2028 or 2029, based on people familiar with the company’s thinking 4.