Major tech companies have begun offering to directly invest in SK hynix's new chip production lines and bankroll purchases of advanced manufacturing equipment, Reuters has reported, in what sources described as an unprecedented escalation of efforts to secure memory supply during a global shortage. SK is weighing the proposals cautiously, concerned that accepting could leave it beholden to individual buyers.

The offers go well beyond standard long-term supply agreements. Some customers have proposed funding dedicated memory production lines at SK hynix's facilities, according to people familiar with the discussions who spoke to Reuters, while others have offered to cover the cost of ASML EUV lithography machines, which are used to pattern circuits on silicon wafers and individually cost hundreds of millions of dollars.

Arrangements where customers fund dedicated production capacity are common in logic chipmaking, but they have no precedent in the memory industry, where DRAM and NAND have historically been produced speculatively and sold into an open market.

One proposal targeted the first phase of SK hynix's upcoming Yongin DRAM fab in South Korea. SK told Reuters that it’s “comprehensively reviewing various approaches and structural alternatives that differ from conventional long-term agreements," but declined to delve into the specifics. The company, now Asia's third most valuable by market cap behind TSMC and Samsung, has seen its share price rise 154% this year.

"Regardless of the type of offer, available capacity is essentially zero right now," said another source to Reuters. "There isn't even a small portion that can be designated for a specific customer."

The proposals are especially striking given the shift in the supply dynamic. As recently as February, Samsung and SK hynix were moving in opposite directions, shortening contract terms and adopting post-settlement pricing mechanisms that allowed them to capture rising spot prices. Customers are now attempting to bypass that pricing power by co-investing in the production infrastructure itself

SK hynix and its rivals, Samsung and Micron, have all acknowledged holding discussions with customers about multi-year supply deals, but those being considered by SK are entirely different. Among the mechanisms under consideration are price-band agreements that would set annual floor and ceiling prices, eliminating the quarterly negotiations that have historically defined memory pricing. Separate discussions have reportedly involved prepayment structures requiring customers to put up 30% to 40% of the contract value in cash upfront.

Samsung told Reuters that its recently signed long-term agreements with customers are "binding," though it didn’t elaborate. Suppliers are also being careful about how they distribute limited capacity, with one source telling Reuters they want to avoid the appearance of favoring specific customers during the AI buildout.

SK Group chairman Chey Tae-won said in March that he expects the memory shortage to persist through 2030, and both Samsung and SK hynix warned investors last month that supply constraints would continue through at least 2027. One source told Reuters that chipmakers don't want to "pick a horse" in the AI race and end up backing the wrong one.

By: DocMemory
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