A DRAM supply crunch triggered by a surge in AI demand is leading NAND makers to make direct investments. The approach links supply contracts to investments to lock in supply and demand, and is seen as a new response that goes beyond the split structure of NAND and DRAM supply chains.

Reuters reported on March 26 that Taiwan DRAM maker Nanya Technology raised about $2.5 billion, or about 3.5 trillion won, in a private placement from four companies including SanDisk Technologies, SK Hynix subsidiary Solidigm, Cisco Systems and Kioxia. The private placement price was set at 223.9 Taiwan dollars per share, slightly below the previous day's close of 226.5 Taiwan dollars. On the news, Nanya shares surged to as high as 249 Taiwan dollars, near the daily limit of 10 percent.

By investment size, SanDisk was the largest at about 31 billion Taiwan dollars, or about 970 billion won. Solidigm, Cisco and Kioxia each invested about 16 billion Taiwan dollars, or about 500 billion won. Nanya said it plans to use the funds for investment in plant facilities and equipment for advanced DRAM production.

The investment is not limited to a simple financial stake. SanDisk also signed a multi-year DRAM supply contract with Nanya. Kioxia also signed a long-term DRAM supply agreement. Both companies run NAND flash-based solid-state drive businesses and have an urgent need to secure stable sources of DRAM supply amid surging AI demand. DRAM is used alongside NAND as a key component in SSDs and AI servers, but the supply chains are completely separate, making it difficult for NAND makers to secure DRAM supply on their own.

The deal is interpreted as a new approach in which NAND-focused companies lock in DRAM supply by making direct equity investments. Solidigm's participation under SK Hynix also aligns with a group-level strategy of vertical integration of DRAM and NAND.

For reference, the investment announcement came shortly after SK Hynix said the previous day it would pursue a U.S. stock market listing within this year. SK Hynix's U.S. listing has been discussed at up to $14 billion, or about 20 trillion won.