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Samsung Electro-Mechanics signs MLCC supply deal for AI servers worth 290 billion won

Samsung Electro-Mechanics said on Monday it signed a supply contract for multilayer ceramic capacitors used in AI servers worth about 290 billion won, or $210 million. The one-year supply period runs from Jan. 1 to Dec. 31, 2027. The company said it is its sixth long-term supply agreement this year under filings. It has signed consecutive long-term deals since May and reported a cumulative value of about 3.9 trillion won.

Industry

Wafer supply bottleneck drives longer-term contracts

As supply bottlenecks for AI semiconductors spread from high-bandwidth memory and substrates to silicon wafers, long-term supply agreement terms have extended to as long as 10 years from a standard 3 to 5 years. Wafer capacity expansion has stalled while advanced packaging has increased wafer consumption. Micron provided $500 million in strategic financing to GlobalWafers and signed a 10-year agreement. South Korean memory makers are also shifting toward 5-year-plus lock-in and capacity-linked contracts.

Industry

Samsung Electronics, SK Hynix diverge on long-term memory contract strategy

Samsung Electronics and SK Hynix are shifting memory sales to multi-year long-term supply agreements, but are taking different approaches. Samsung is seeking to lock in 60 to 70 percent of capacity under contracts that fix price and volume. SK Hynix is building up deals but keeping part of output outside contracts, citing supply constraints. With terms undisclosed, the outcome is expected to be judged by earnings and shareholder returns.