The memory-chip business used to run on quarterly haggling, with buyers and sellers meeting to settle prices every few months and leaving the rest to the spot market. That model is coming apart. According to a report by Korean media outlet KED Global on October 9, Samsung Electronics has already locked up about 75% to 80% of its memory-chip capacity for next year through long-term supply agreements, including its high-bandwidth memory.
The buyers doing the locking are the biggest names in technology. Nvidia, Google and Microsoft are among the companies that have signed deals generally spanning more than five years, with provisions for annual rolling renewals. For everyone else, the report said, the picture is stark: technology companies that have not yet signed are left to fight over the remaining 20% or so of capacity.
The shift runs deeper than a single supplier. The memory industry’s pricing is moving away from quarterly negotiation and spot trading toward contracts that lock in volume up front, and the rhythm of how buyers stock up is lengthening to match. Companies that once bought what they needed each quarter are now committing years in advance, because the alternative is being shut out.
High-bandwidth memory, or HBM, is the reason the terms have changed. The chips that power AI accelerators need enormous amounts of fast memory stacked directly beside them, and HBM is the product that fills that need. Demand has run well ahead of supply for two years, and the companies that control HBM capacity, Samsung, SK Hynix and Micron, hold unusual bargaining power over their customers.
That power is now being converted into contracts. For Samsung, locking up three-quarters of next year’s output in advance trades flexibility for certainty. The company gives up the chance to capture price spikes later, but it gains visibility into revenue and a set of committed buyers who cannot walk away when the cycle turns.
For the buyers, the long contracts are a defensive move. Nvidia’s accelerator sales depend on a steady flow of HBM, and a shortage of memory would cap how many chips it can ship regardless of demand. Google and Microsoft, which run the cloud infrastructure behind AI services, face the same arithmetic. A five-year agreement is the price of a guarantee that the memory will be there.
The losers in the new arrangement are the buyers who did not move early. Smaller AI companies, and those that hesitated on price, now confront a market where the bulk of next year’s supply is already spoken for. The remaining capacity will be allocated to whoever is willing to pay the most, and the spot market is becoming a thin, expensive afterthought.
The change also reshapes how the memory business handles risk. Quarterly pricing used to spread pain and gain across the whole industry, with every buyer and seller renegotiating as conditions shifted. Long contracts concentrate that risk, locking both sides into terms set when demand was red hot. If AI spending cools, the buyers are stuck holding expensive commitments; if it keeps climbing, the sellers have left money on the table.
The report did not spell out the prices embedded in the agreements, and Samsung has not commented publicly on the details. What is clear is the direction: the memory industry’s center of gravity has moved from the negotiating table to the contract, and the era of buying memory three months at a time is giving way to something closer to infrastructure procurement.
The trend echoes what has already happened in the chip foundry and packaging markets, where capacity is now reserved years ahead through prepaid agreements. Memory is simply the latest link in the AI supply chain to adopt the same discipline, as the fear of missing out on supply overtakes the fear of overpaying.
For Samsung, the timing is fortunate. The company has trailed SK Hynix in the most advanced HBM for parts of the past two years, and locking in next year’s capacity gives it a guaranteed revenue base while it works to close the technology gap. The contracts also hand it a stronger negotiating position with the customers who did not sign, who now must come to the table on Samsung’s terms.
The report’s core number, 75% to 80% of capacity already committed, is the kind of figure that signals a market in a new regime. Buyers who remember the memory industry’s brutal boom-and-bust cycles may view the long contracts with caution. But in a business where the alternative is not getting the chips at all, the choice has already been made for them.
The change has not been lost on investors. Memory makers have long been valued as cyclical businesses whose fortunes swing with supply and demand, and whose pricing power fades the moment a glut appears. Long contracts, if they stick, smooth that cycle, giving the companies something closer to the predictable revenue streams of the foundries and packaging houses that already sell capacity years in advance.
