Chinese technology giants, including Alibaba, Tencent, and ByteDance, are securing long-term memory supply agreements with Samsung Electronics and SK Hynix. These contracts span up to ten years, with some extending until 2035, significantly exceeding the standard industry cycle of three to five years.
The procurement focuses on server DDR memory and LPDDR memory. The shift toward LPDDR in AI server platforms is driven by its low power consumption, which has become critical as generative AI and large-scale inference operations expand. Companies are accelerating purchases to mitigate potential supply shortages.
Local manufacturers like ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC) currently struggle to meet the high-performance server memory demands of domestic cloud providers. While CXMT has supplied LPDDR6 memory for Xiaomi's XRING O3 chip, its overall production capacity and scale remain limited.
The move by Chinese internet firms is a strategic response to concerns about falling behind in the AI computing race, especially as major US cloud providers have already locked in significant storage resources. Securing stable international supply is currently prioritized over domestic substitution efforts.
