Memory chipmakers SK Hynix and Samsung see AI‑driven demand as a new, steadier boom. Customers now lock in three‑to five‑year contracts, shifting focus from price to supply security amid a chip shortage. This shift could end the sector’s historic boom‑and‑bust rhythm. Investors now bet that longer‑term contracts will cushion price swings and allow higher margins.

SK Hynix, the second‑largest memory maker, projects operating margins of 72 percent, while Samsung’s memory division is expected to exceed 60 percent. Combined, the two firms forecast net profits of $266 bn this year, dwarfing TSMC’s $81 bn. Yet both Korean stocks trade below six times projected earnings, reflecting lingering cyclicality. Investors view the gap as a potential upside if supply constraints persist.

Samsung’s chief executive, Young Hyun Jun, outlined a record 110 trillion‑won spend on capacity expansion, while SK Hynix plans a similar scale of investment. Analysts predict memory prices could climb 50 percent in the next quarter, lifting margins above 80 percent and turning the sector into a seller’s market. Long‑term contracts reduce volatility and empower producers to raise prices.

However, rapid capacity build‑outs risk oversupply if hyperscalers scale back, and Chinese rivals like CXMT and YMTC could erode lower‑end margins. Even with higher prices, analysts warn the upcycle may still cycle, driven by data‑centre demand fluctuations. Investors should monitor contract lengths and supply‑side shocks. Their impact will shape margin sustainability and long‑term investment decisions.