Samsung signs 'non-cancellable/non-returnable' contract with major customer, postpones DDR4 production end
Samsung, which was expected to discontinue production of older generation DDR4 chips, is reportedly trying to maximize profits by entering into long-term sales contracts for DDR4 with certain customers on the condition that they cannot be canceled or returned.
(Individual) Samsung Watch DDR4 Limited Release Slow Stop Terminal ``NCNR Agreement''
Samsung to delay its planned DDR4 end-of-life due to signing a long-term 'non-cancellable, non-returnable' contract with key customer — agreement will not relieve consumer shortage, supply earmarked for server clients | Tom's Hardware
Samsung is reportedly planning to end production of DDR4 chips by the end of 2025 and focus its manufacturing capacity on more profitable technologies, such as next-generation DDR5, LPDDR5, and HBM for GPUs and AI systems. Rivals SK Hynix and Micron are also expected to end production of DDR4, leading to a surge in DDR4 purchases by customers wary of a DDR4 shortage, pushing the price of DDR4 above that of DDR5.
According to new reports, Samsung is planning to maximize profits by slowing down the pace of DDR4 production discontinuation in the fourth quarter of 2025 and supplying it to certain customers in the first quarter of 2026. It has reportedly decided that maintaining DDR4 for the time being, which is technologically mature, has high profit margins and is easy to manufacture, is better than discontinuing production.
According to Taiwanese media outlet DigiTimes, non-cancellable and non-returnable contracts typically arise when a customer is certain to be unable to receive supplies for a long period of time and a significant price increase is expected. Suppliers use these contracts to ensure stable, long-term supplies by requiring the customer to confirm terms such as price and quantity before placing an order. While customers may face the risk of compensation for breaching the contract, the advantage of having the price fixed after the contract is signed is that they are not affected by subsequent market price fluctuations.
A Samsung spokesperson said in response to the reports that the company is entering into special contracts with certain customers, 'We cannot comment on customer-related matters.'
The market price for DDR4 16GB has reached a record high of $60 (about 9,400 yen), but Samsung may be offering a deal starting from a minimum of $20 (about 3,100 yen).
Technology media Tom's Hardware said, 'Even with Samsung's continued production, the serious supply shortage will not be alleviated, and industry insiders believe it will be impossible to close the DDR4 supply-demand gap in 2026. Prices are expected to continue to rise, and overall supply capacity is expected to remain severely insufficient.'
Samsung has also reportedly revised its DDR5 pricing, leaving customers facing inescapable high prices whether they choose DDR4 or DDR5.
Samsung raises DDR5 memory prices by more than 100% - GIGAZINE
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