Chinese cloud giants seek long-term server memory supply from Samsung, SK Hynix, South Korean media reports

Alibaba (9988), Tencent (0700), ByteDance and other major Chinese cloud providers are seeking long-term server memory supply deals with Samsung and SK Hynix to ease the AI-driven shortage, South Korean media reported.

Some customers have proposed contract terms of up to 10 years and requested supply until 2035, far exceeding the industry norm of three to five years.

The report noted that Chinese cloud vendors’ demand extends beyond server DDR to LPDDR as well. LPDDR is widely used in smartphones and other mobile devices for its low power consumption and low heat generation. 

However, the technology is increasingly adopted by server manufacturers to improve power efficiency as AI servers demand greater energy efficiency, putting them in direct competition for supply with smartphone and PC manufacturers.

Daishin Securities projects that server makers will pay near server-grade memory prices to secure LPDDR supply, pushing memory prices higher.

Semiconductor research organization SemiAnalysis noted in its September report that China has built over 24 GW of AI data center capacity, trailing the US at 56 GW. China also has about 20 GW of data centers under construction or in planning.

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