American and Chinese leading cloud companies are requesting long‑term (10‑year) supply agreements to meet demand for high‑performance DDR and LPDDR technologies for AI servers by 2035. Such moves are expected to introduce new volatility into the entire memory market.
Recently, the four major Chinese cloud firms—Alibaba, Baidu, Tencent, and ByteDance—have reportedly requested long‑term (10‑year) supply agreements from key memory suppliers including Samsung Electronics for high‑performance server DDR5 and LPDDR5X. They are judged to believe that CXMT has superior performance in AI server DDR and LPDDR technologies compared with Samsung Electronics and SK Hynix.
Samsung Electronics estimates that Chinese CSPs currently hold about 7–8 % of the total DDR market share. If a long‑term supply agreement is concluded, revenue growth potential would be further expanded. In particular, competition for securing memory volume will exert upward pricing pressure; Samsung is estimated to have already allocated 70–80 % of its planned production volume to LTA.
KB Securities research head suggested that if long‑term supply agreements expand to a 10‑year horizon, memory price negotiation power and sales prospects would be further strengthened. This is said to soften volatility in the memory industry, elevate long‑term profitability, and thus accelerate Samsung Electronics' valuation reevaluation, making it a turning point for corporate value reassessment.
The AI revenue growth and 10‑year early contracts represent a turning point for corporate value reassessment. Kim Dong‑won, head, confirmed that AI revenue growth rate is expected to outpace computing cost increases; expanding AI infrastructure investment will directly increase memory demand, which would significantly enhance the capital allocation of the AI industry.