Samsung and SK hynix Reportedly Shift to 3-5 Year Long-Term Supply Contracts

According to Aju Daily, Samsung Electronics and SK hynix have decided to sign 3-5 year long-term supply contracts with major global technology companies, moving away from one-year short-term agreements. This move aims to establish a stable, high-margin business model through strategic cooperation with customers in the early stages of AI memory development.

Samsung Electronics previously stated that it is pushing to convert its supply contracts from annual or quarterly terms to multi-year agreements lasting three to five years, and is expected to stably supply three-year memory products to key customers such as Microsoft and Google. According to industry sources, Samsung Electronics plans to apply long-term agreements (LTAs) of at least three years to new contracts with major customers starting this year. While the company still accepted quarterly contracts last year, it has begun shifting partially to LTAs this year.

It is said that SK hynix is in discussions with Google regarding a five-year long-term supply contract for general-purpose DRAM in order to maximize supply stability. As a key supplier of Google's 5th-generation High Bandwidth Memory (HBM3E), SK hynix is negotiating an extension of the contract term by two years, conditional on the supply of next-generation HBM. Final coordination is expected to be completed within the first half of this year.