Key Takeaways
- Major chipmakers are raising the share of capacity committed to long-term supply agreements.
- Industry expects 2027 to be the tightest year for memory supply.
- SK Hynix is considering US memory options amid customer demand.
The memory industry is facing a significant supply shortage, with major chipmakers increasing their commitment to long-term supply agreements (LTAs).
According to industry sources, Kioxia has about 50% of its capacity tied up in LTAs, while South Korea's two major vendors reserve around 70% of their capacity for such agreements.
Micron also has approximately 60% of its capacity locked into LTAs, indicating a growing trend among memory manufacturers to secure long-term contracts.
The industry expects 2027 to be the tightest year for memory supply, with chipmakers extending the duration of LTAs from three to five years.
This move is driven by the increasing demand from customers, who are securing 2027 supply well in advance, putting pressure on memory makers to consider additional capacity.
SK Hynix is among the companies keeping its US memory options open, as customers move earlier to secure 2027 supply, with tightening availability raising pressure on memory makers.
The decision by SK Hynix reflects the broader industry trend of exploring new markets and capacity expansion to meet the growing demand.
Industry experts predict that the shortage will continue to impact the market, with companies looking to diversify their supply chains and secure long-term agreements to mitigate risks.
