Long‑term arrangements touted by companies like SK Hynix aren’t as solid as they appear. Contracts worth billions have become the commercial glue of the AI boom, yet investors shouldn’t assume they’ll hold if the frenzy fades.

AI suppliers argue these deals give unprecedented visibility into future revenue, letting them wow investors with promises of bumper sales and profits ahead. The computer‑memory business, once cutthroat and cyclical, has turned into a more stable arena because of the explosive growth of autonomous AI agents that are memory intensive.

The world’s big memory‑chip manufacturers—Samsung Electronics in South Korea and Micron Technology in the U.S.—are raking in record profits and touting a supply shortage expected to last into 2028. An executive at SK Hynix, which listed shares in New York this month, suggested long‑term deals could improve the market’s view of the entire memory business.

Micron has been an especially active dealmaker. Its “strategic customer agreements” typically last five years and are take‑or‑pay, meaning the buyer must pay whether or not they receive shipment. Last month, Micron CEO Sanjay Mehrotra said on an earnings call that these agreements would supply more than half of the company’s revenue in the years ahead.