Rumor
Samsung and SK Hynix leverage commodity DRAM supply constraints and shift to quarterly contracts
Thursday, December 18, 2025 at 11:57 AM
Samsung Electronics and SK Hynix are shifting to quarterly contracts for commodity DRAM to maximize profitability as server DRAM quotes rise 60-70%. While both firms prioritize HBM capacity, SK Hynix plans to expand its 1c DRAM capacity significantly, and Samsung is optimizing HBM4 samples for Nvidia.
Context
Samsung Electronics and SK Hynix are currently rejecting multi-year supply contracts from major clients like Amazon, Google, and Apple, opting instead for quarterly pricing to capitalize on a massive AI-driven supply crunch. Driven by unprecedented demand for HBM3E memory used in Nvidia’s H200 and custom AI chips from Broadcom, server DRAM prices are projected to surge by 144% throughout 2026. Both Korean manufacturers have already proposed 60–70% price hikes for the first quarter, signaling a structural shift toward a prolonged seller’s market that could last until 2027.
This pricing power is expected to drive Samsung’s annual operating profit to 155 trillion KRW and SK Hynix to 148 trillion KRW, marking massive year-over-year growth. Conversely, hardware manufacturers like Dell, HP, and Xiaomi face severe margin compression, as memory now exceeds 20% of device production costs. The shortage is even pressuring Samsung’s own mobile division ahead of the Galaxy S26 launch, as global tech firms compete for the limited supply required to power AI services like Gemini and Copilot.
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