SK hynix is in final talks with Microsoft over a multi-year DDR5 contract that industry sources put in the tens of billions of dollars, according to KED Global.
The contract is expected to start this year and run three years. Google is pursuing long-term DRAM supply from the same vendor, and sources in Seoul say both hyperscalers are chasing comparable terms from Samsung. Neither deal is signed, and neither buyer nor supplier has confirmed one.
What is being negotiated away here is the quarterly cycle. Memory has been bought quarter by quarter for as long as anyone at the table can remember, because buyers wanted the option to ride prices down. Asking for three years locked is an admission that the option is worthless in a shortage.
The numbers explain the change of habit. TrendForce expects conventional DRAM contract prices to keep rising after they doubled quarter on quarter in the first quarter, with a further 58 to 63 percent forecast for April to June. A buyer signing a three-year contract in that market is not getting a discount. It is buying the right to be supplied at all.
Spot has been going the other way, which is where the story gets interesting. Tobey Gonnerman, president of semiconductor distributor Fusion Worldwide, told Reuters: "We have seen a cooling (in memory chip spot prices) over the last 3-4 weeks yes. We do believe it's temporary." He added that "The demand and backlog remains strong," and that memory manufacturing would take a long time to meet total demand.
Decoded, a distributor is telling the market to ignore its own price feed. The interest is worth naming: a distributor's book is worth more in a rising market than a falling one.
Samsung has been steering customers the same way. Co-CEO Jun Young-hyun has told shareholders the company is working with major customers to shift to contracts of three to five years, framed as shielding those customers from fluctuations in demand. The framing is generous. In a shortage the shield mostly protects the supplier, which converts a spot exposure into three to five years of booked volume at prices set near the top of the cycle.
The bull case is not subtle. "You couldn't ask for things to be better," said Ko Yeongmin, analyst at Daol Investment & Securities, on the strength of the memory market.
There is evidence against it, and it should be on the record. Spot DRAM has eased as device makers raised prices on phones and computers and dented consumer demand. Google's memory-saving technology TurboQuant contributed to a selloff in memory chip stocks, and Samsung shares have lost 14 percent since the Middle East war began on February 28, even while holding a 50 percent gain for the year. A hyperscaler that has just found a way to need less DRAM signing a three-year DRAM contract is a contradiction someone should make it explain.
Nobody has produced volumes, price terms, or confirmation that the Google talks are as advanced as the Microsoft ones. Until a filing appears, the tens of billions figure rests on unnamed industry sources in Seoul.
Bootnote: a long-term agreement in memory is not a price list, it is a risk transfer. The supplier gives up upside if prices keep climbing; the buyer gives up the chance to buy cheaply if they fall. Both sides signing anyway says each of them expects the shortage to outlast the contract, which is a stronger statement about 2027 and 2028 supply than anything either company has put in a press release.
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