Samsung Electronics is considering transitioning to multi-year contracts for memory chip supplies. This move could stabilize revenues and alleviate concerns over component shortages, according to Bloomberg.
The company is discussing extending agreements from the current quarterly or annual terms to three to five years.
CEO Jun Young-hyun stated that demand for memory chips for AI will continue to surge sharply in 2026, prompting a shift in strategy.
Samsung Electronics, Micron Technology, and SK Hynix dominate the global data storage market. In recent years, all three companies have shifted production towards specialized chips designed for Nvidia's AI accelerators, leading to a shortage of more traditional semiconductor types.
The chip shortage has driven up prices for a wide range of products—from laptops and smartphones to cars and data centers. Many experts anticipate the situation will worsen.
Experts Predict Price Increases for Laptops and Smartphones Due to AI Boom
SK Hynix Chairman Choi Tae-won stated that the global DRAM crisis will last until 2030, as manufacturers struggle to ramp up production to meet rising demand.
Crisis Mode
Due to the shortage and the conflict in the Middle East, Samsung has put its mobile division into "crisis mode," reports South Korean outlet Fnnew. The company expects its profits in 2026 to drop by 60%.
Prior to this, the television and home appliance divisions were also placed into "crisis mode."
The reason lies in declining margins due to a spike in memory chip prices, which have increased by 850% over the past year, the report noted. Another issue is the disruption of logistics chains caused by the conflict in the Middle East.
Management has ordered a 30% cut in expenses across all device development sectors. Options for "staff restructuring" and voluntary retirement programs are being discussed.
In February, Samsung unveiled its new S26 smartphone lineup, with artificial intelligence as a central feature.
Silicon Curtain