KT said on Monday it provided advance payments for memory purchases to partner companies struggling due to global supply chain instability.

Global supply chains have been unsettled recently due to geopolitical risks in the Middle East, a strong foreign-exchange rate trend and rising raw material prices. Expanding large-scale artificial intelligence (AI) investment has increased data centre demand, adding to pressure from higher prices and tighter supplies of key components including memory.

KT said it paid advances so set-top box suppliers, which are heavily affected by memory supply and price increases, can purchase memory in advance that they can use for about six months. A KT official said it eased supplier burdens and minimised the period in which disruptions to device production occur. The official said it also plans to review ways to expand support depending on market conditions.

KT said it was the first among South Korea’s three telecom operators to introduce a price linkage system for delivery payments in 2023. The system reflects changes in raw material prices in delivery payments. It also said it is working to improve suppliers’ business predictability by expanding its demand forecast period from the existing 4 to 6 months to as long as 1 to 3 years and by pursuing a shift to long-term contracts of 2 to 3 years for items affected by supply chain issues.

Hye-jin Kwon (권혜진), head of KT’s SCM office and an executive director, said the recent supply chain crisis is difficult to resolve through the efforts of individual companies alone. She said KT will continue support to help strengthen suppliers’ competitiveness and provide stable services.