According to informed sources, SK Hynix is receiving aggressive courting from major global technology firms, with companies proposing investments in its new production lines and funding for expensive manufacturing equipment to secure memory chip supply resources.
These partnership offers are unprecedented in the global memory chip industry, highlighting the severe shortage of memory chips worldwide. Amid the artificial intelligence boom, chip manufacturers are struggling to keep up with surging market demand. Memory chips serve as core components in AI data centers, smartphones, personal computers, and other fields.
Multiple sources indicate that customers have presented various proposals to the South Korean chipmaker, including investments dedicated to building specialized memory production lines.
Three other sources revealed that another proposal involves customers providing financing for SK Hynix's purchase of chip manufacturing equipment, such as ASML's extreme ultraviolet lithography machines. This equipment, used for printing circuits on silicon wafers, carries price tags reaching hundreds of millions of dollars.
However, two sources noted that the well-funded chip manufacturer remains cautious about accepting financial commitments from customers. Such deals could potentially bind the company to specific buyers and require supplying chips at lower prices in exchange for "longer-term, more stable revenue guarantees."
One source stated: "Regardless of the type of offer, currently available production capacity is nearly zero. Not even a small portion of capacity can be allocated to specific customers."
Another source mentioned that SK Hynix is constructing a large manufacturing facility in Yongin, South Korea, with the first phase expected to primarily produce dynamic random-access memory (DRAM).
The details of these offers are being disclosed for the first time. SK Hynix and its main competitors Samsung Electronics and Micron Technology have all stated they are negotiating multi-year supply contracts with customers, though specific details remain undisclosed.
SK Hynix declined to reveal specific terms of customer contracts but stated: "We are comprehensively reviewing various methods and structural alternatives that differ from traditional long-term agreements."
SK Hynix ranks as Asia's third most valuable company by market capitalization, trailing only TSMC and Samsung. The company's stock has surged 154% this year to record highs, driven by growing investor bets on artificial intelligence.
It remains unclear which global tech giants have extended investment proposals to SK Hynix. Major U.S. technology companies including Alphabet, Meta Platforms, Inc., and Microsoft all announced plans last week to increase investments in AI infrastructure.
One source familiar with chipmaker briefings indicated that one long-term agreement structure under discussion involves price range mechanisms that would set annual price floors and ceilings, effectively avoiding quarterly or seasonal price negotiations.
Another structure being discussed involves advance payments requiring customers to prepay 30% to 40% of the total amount.
However, another source noted that chip suppliers are exercising extreme caution in allocating scarce production capacity to avoid regulatory scrutiny or perceptions of favoring specific customers.
"They don't want to 'choose sides' in the AI race and ultimately back the wrong player," the person said.
