Samsung Electronics says long-term memory contract extensions, additional supply requests flooding in

Samsung Electronics said it has already signed long-term memory supply agreements with 10 major global customers and is in active supply negotiations with 10 more.

Kim Jae-jun, Samsung Electronics' executive vice president and head of memory strategy marketing, said during the company's third-quarter earnings conference call Thursday that "the number of customers seeking substantial, long-term memory supply is continuing to grow," adding that negotiations with some customers are already in the final stages.

Samsung Electronics typically enters memory supply contracts spanning five years or more. Some customers who have already signed long-term agreements are now seeking to extend them, with extension talks currently underway.

Kim said "demand presented through additional contracts has also far exceeded our expectations," pushing back against recent concerns that a slowdown in AI investment could dampen memory demand.

Kim added that requests for additional supply on top of existing contracts have come in, and that Samsung is reviewing its medium- to long-term production options, though current available capacity is not sufficient. "We are examining supply response scenarios from various angles," Kim said.

The range of customers seeking multi-year supply agreements is also broadening, Kim said.

"The customer base is expanding beyond hyperscalers, server OEMs and system-on-chip companies directly tied to the spread of AI services, to a diverse range of customers including those in mobile, automotive and network segments," Kim said.

With companies in mobile, automotive and telecom joining traditional AI data center operators in seeking long-term memory supply, visibility into medium- to long-term demand has improved considerably.

Kim said Samsung's target of having multi-year supply contracts cover 60 to 70 percent of its production capacity by 2030 "is becoming increasingly achievable," and emphasized that a broader rollout of multi-year supply agreements "will be a major help in establishing a stable, contract-based business model over the long term."