Samsung Considers Switching Memory Chip Contracts to Multi-Year Agreements to Meet Surging AI Demand

Samsung Electronics is considering shifting its memory chip contract model from short-term to multi-year agreements. According to Bloomberg, this adjustment will extend contract terms to 3-5 years—much longer than the current quarterly or annual practice—aiming to stabilize supply and ease concerns about key component shortages.

Samsung co-CEO Jun Young-hyun stated at the annual shareholder meeting that this shift is significant as AI memory chip demand is expected to surge continuously in 2026. AI models, especially large language models (LLMs), have massive and sustained demand for high-bandwidth memory (HBM) and advanced DRAM, leading to supply tightness in the industry.

This move essentially uses contractual tools to hedge against cyclical risks in the semiconductor industry while deeply aligning with the long-term demand of the AI wave. By locking in high-quality customers via long-term contracts, Samsung can reduce the impact of spot market fluctuations and signal supply stability to the market.