Against the backdrop of talks about a possible recession in the memory market, signs of the opposite trend have appeared: major technology companies are seeking to secure DRAM supplies for years to come. According to supply chains, so-called hyperscalers, including Google and Microsoft, are entering into long-term agreements with manufacturers to guarantee stable supply volumes.
Earlier, the market was shaken by rumors that Google's TurboQuant compression algorithm could complete the "supercycle" in the memory industry. This caused panic among retailers and some supply chain participants, which led to a decrease in the capitalization of companies in the sector and a drop in prices for DDR5 in retail around the world. However, new data shows that these fears may have been premature.
According to a Hankyung report, South Korean SK hynix is in the final stages of negotiations with Microsoft to conclude a major contract for the supply of DDR5. The deal is estimated at tens of trillions of won and will be valid for three years, starting this year.
Experts note that such agreements indicate two key trends at once. Firstly, memory manufacturers are seeking to fix stable demand for several years ahead, which helps to plan the expansion of production and income. Secondly, the very fact of three-year contracts may mean that the growth cycle of the memory market will last longer than previously expected — possibly beyond 2028.
The main priority of hyperscalers now is not to reduce costs, but to ensure a sufficient amount of DRAM for the development of infrastructure. According to estimates, memory costs already exceed 30% of their total budget, which emphasizes the strategic importance of this resource. As a result, the market is increasingly turning not into price competition, but into a struggle for access to supplies.