Samsung Electronics HBM4. Photo courtesy of Samsung Electronics
Samsung Electronics (005930.KS) said on the 30th that frontier artificial intelligence (AI) model developers have recently approached the company directly to express intent to purchase memory and request multi-year supply contracts, according to remarks made during its earnings conference call for the second quarter of this year.
Memory chips are typically supplied to AI chip developers, including Nvidia. Cloud service providers (CSPs) then build large-scale AI servers, including data centers, using these AI chips, which AI model developers generally use for training and inference computing.
But as the entire AI value chain grapples with supply shortages, AI model developers — the end customers — are now pursuing direct supply contracts with Samsung Electronics to expand their AI servers on their own.
“Considering the long lead time of more than three and a half years from building a new fab to producing wafers, expanding supply through capacity additions will inevitably take a considerable amount of time,” Samsung Electronics said. “It will be difficult to expect a significant increase in supply until 2028.” The company added, “The supply shortage is expected to intensify next year compared to this year and continue into 2028.”
In response, Samsung Electronics is also expanding its long-term agreements (LTAs).