Chinese Big Tech Seeks 10-Year Memory Supply Deals
The global race to invest in artificial intelligence (AI) data centers is reshaping memory chip supply agreements. Long-term agreements (LTAs), traditionally structured around five-year terms, could extend to a decade, potentially improving earnings visibility for South Korean chipmakers such as Sam
South Korean chipmakers Samsung Electronics and SK hynix may benefit from long-term memory supply agreements with Chinese big tech firms. The global rush to build AI data centers is prompting Chinese cloud providers such as Alibaba, Baidu, Tencent and ByteDance to seek extended contracts with leading memory manufacturers. These agreements could cover a decade, reaching 2035, rather than the traditional five-year term.
Although no deals have been finalized, the requests signal concerns about domestic supplier Changxin Memory Technologies' reliability. China now boasts over 24 GW of data center capacity, with another 20 GW under construction or planned, making it the world's second-largest market after the United States. Chinese AI infrastructure expansion is driving demand for both DDR and LPDDR memory, used in server environments.
U.S. export controls further complicate the supply chain. While Samsung Electronics has secured a significant portion of its 2027 memory output through long-term agreements, the prospect of decade-long deals could bolster its pricing power and sales visibility. If Chinese CSPs' requests materialize, Samsung could see up to 80% of its planned memory output covered by such contracts.
Written by urgent.news from BusinessKorea's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
