(March 18): Samsung Electronics Co is considering a shift toward multi-year contracts for memory chips, a much longer timeframe than is typical that may help stabilise supply and ease concerns about a shortage of the essential components.
The company is considering lengthening contracts from the current quarterly or annual agreements to as much as three to five years, co-chief executive officer Jun Young-hyun told shareholders at the company’s annual general meeting. That’s as demand for artificial intelligence (AI) memory chips is expected to continue surging in 2026, he said.
Samsung shares soared as much as 6.5% on Korea Exchange, extending gains for the third session and lifting other group stocks. Samsung C&T Corp and Samsung Life Insurance Co surged as much as 8.9% and 13%, respectively.
SK Hynix Inc, Samsung and Micron Technology Inc together dominate the supply of memory chips globally. The three have shifted production in recent years toward a specialised form of memory intended for use in Nvidia Corp’s in-demand AI accelerators, leading to a shortfall in output of more conventional storage.
That deficit is beginning to hammer profits, derail corporate plans and inflate price tags on everything from laptops and smartphones to cars and data centres — and many expect the crunch to worsen before it improves. SK Hynix is preparing to outline measures to help stabilise prices, SK Group chairman Chey Tae-won said this week, without elaborating.
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Chey said he expected that global shortage to persist another four to five years because of endemic constraints in semiconductor production.
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