In an unusual situation in which conventional DRAM prices have surged and overtaken high-bandwidth memory (HBM) profitability, Samsung Electronics and SK Hynix have drawn attention by presenting different tactics. Samsung Electronics offered a "balanced product mix." SK Hynix pointed to "redesigning the long-term supply agreement (LTA) structure."

The profitability reversal itself was first officially confirmed on a first-quarter conference call. Samsung Electronics said on its first-quarter earnings conference call on April 30, "It is true that conventional DRAM is showing relatively higher profitability than HBM as prices for conventional memory have continued to rise recently." The company added, "We also recognise that there are external views that, from the perspective of short-term performance, it is advantageous to run the sales mix centred on server DDR rather than HBM."

The cause lies in the time lag in the price negotiation structure. Samsung Electronics explained, "While HBM operates annual advance price negotiations considering the lead time needed to prepare backend capacity, conventional DRAM conducts quarterly negotiations." As conventional DRAM price increases expanded sharply each quarter, HBM prices were held at levels agreed at the start of the year, reversing the short-term margin gap.

◆Samsung Electronics: "Maintain balanced product mix"; SK Hynix: "Reviewing a new LTA structure"

Samsung Electronics decided it would not be swayed by short-term profitability. It placed more weight on supply chain stability across the broader AI ecosystem than on maximising short-term profitability. The company assessed, "If we run a product mix heavily skewed toward conventional DRAM over HBM by considering only short-term profitability, there is concern that constraints could arise in the AI infrastructure build itself." It analysed that as inference services and agentic AI spread, demand for conventional servers is also rising along with AI servers, meaning demand for HBM and conventional DRAM is closely linked. Samsung Electronics explained, "We plan to execute a balanced product mix by comprehensively considering various factors such as mid-to-long-term growth potential, long-term customer relationships and securing technological competitiveness."

SK Hynix, on the other hand, set its direction toward changing the price negotiation structure itself. SK Hynix said earlier on its first-quarter earnings call on April 23, "As customers perceive securing volume rather than price as the risk, requests for securing mid-to-long-term volumes (LTAs) are flooding in." It added, "We are reviewing a new type of structural alternative that provides supply stability to customers and a stable profit structure to the company," and mentioned, "Through this, we will reduce the volatility unique to the memory industry and raise the market's evaluation by one level." This is read as meaning it will overhaul the negotiating practice itself for conventional DRAM, which is exposed to quarterly price fluctuations.

SK Hynix did not directly mention the profitability reversal itself. Instead, it assessed, "This price increase is due to structural changes," and said, "Suppliers' investment slowed after the past downturn, and there are limits to short-term production increases due to a lack of available space." It effectively interpreted customer behaviour that prioritises volume over price as a change in market structure. SK Hynix stressed, "The current trend is only a temporary adjustment," and said, "The current shortages in HBM, server DRAM and eSSD (enterprise solid-state drive) supply and demand will be difficult to resolve in the short term, so the price upcycle will likely be longer than in the past."

◆Stemming from differences in business structure and customer portfolio

The two companies' approaches differ, but both agree that the supply shortage is not a short-term phenomenon. In terms of strategy for how to absorb the stability of AI infrastructure demand into their business structures, Samsung Electronics responds to volatility by balancing its product mix, while SK Hynix responds by redesigning contract structures. Samsung Electronics said, "Available supply falls far short of customer demand," and disclosed that it has received advance demand bookings for 2027, while SK Hynix said, "Over the next three years, customers' requested HBM demand already far exceeds our supply capacity."

The two companies also shared the same outlook on when the profitability gap would narrow again. Samsung Electronics said, "Considering the HBM supply negotiation environment in which the supply-demand gap continues to widen, in 2027 the profitability gap with conventional DRAM is expected to shrink significantly." SK Hynix also said the price upcycle would be longer than in the past and anticipated a continuation of a favourable pricing environment. The timing when HBM capacity expansion gets into full swing is likely to be a common turning point for both companies.

An industry official said, "The fact that the two memory leaders have offered different answers for the same market is a result stemming from differences in business structure and customer portfolio," adding, "Samsung is looking for a method from the perspective of integrated memory and foundry solutions, while SK Hynix is doing so from a business structure with a high proportion of HBM."