Samsung and SK hynix shorten memory contracts as pricing power shifts back to suppliers — both companies now at 40-50% operating margins

Samsung and SK hynix are shifting towards shorter memory supply contracts with post-settlement pricing mechanisms, allowing for price adjustments after delivery. This change comes as the memory market experiences a surge in pricing due to AI infrastructure demand and supply constraints. The big three memory makers, including Micron, are adopting these new contract terms, favoring suppliers and shifting the risk back onto buyers. Operating margins for Samsung and SK hynix are projected to reach 40-50%, a significant increase from previous years, driven by higher prices and disciplined supply management. The structural shift in memory allocation and sales indicates a move of power back to suppliers, impacting contract terms and pricing dynamics in the market.