Samsung Electronics and SK hynix announced at their July–September earnings presentations that they plan to expand long-term supply contracts, as customers prioritize securing long-term supplies of HBM and DRAM. Against a backdrop of rising AI demand, both companies’ supply contracts are viewed as effectively sold out through 2029.
Samsung Electronics said on its earnings call for the July–September quarter that it had signed long-term contracts with 10 customers and was negotiating with an additional 10. Customers seeking contracts range from AI companies to mobile, automotive and networking companies. Samsung also said it was nearing its goal of allocating 60–70% of total production capacity to long-term contracts by 2030.
SK hynix has signed long-term contracts, typically for five years, with 14 customers, including major cloud companies, securing through long-term contracts volumes equivalent to more than half of its total production capacity for next year and the following year. Including volumes under negotiation, DRAM and HBM production is said to be effectively sold out through 2029.
Concerns about oversupply are growing in the market as AI investment increases and Chinese companies expand their facilities, with supply from new plants expected to increase in earnest around 2028. Both companies’ operating profit for the July–September quarter was at a record level, but their share prices remain below their 52-week highs.
Both companies have indicated that they will adjust capacity expansion flexibly in line with demand. Samsung plans to secure production space first and then respond to demand, while SK hynix plans to bring forward factory structural work but open cleanrooms in stages.
Expanding next-generation HBM production is expected to take time, and some analysts believe it will be difficult for the increase in investment in 2027 to make a meaningful contribution to production in 2028.