Saad Ullah
⬤ Microsoft (MSFT) and Google (GOOGL) are racing to lock down supplies of advanced memory chips as AI infrastructure demand explodes globally. Purchasing executives from both companies have been camping out in Korea, negotiating directly with Samsung Electronics and SK hynix over long-term supply deals and pricing. Tensions are running high—during one meeting, SK hynix told Microsoft it couldn't meet their requested terms, which visibly frustrated the attending executive.
⬤ The competition isn't just between Microsoft and Google. Procurement teams from Meta and other tech heavyweights are all fighting for the same limited pool of high-bandwidth memory (HBM), DRAM, and enterprise SSDs that power AI chips and data centers. Here's the catch: only three companies worldwide can produce cutting-edge HBM and LPDDR at scale—SK hynix, Samsung Electronics, and Micron. Production from SK hynix and Samsung is already spoken for through next year, which is why executives are essentially living in Korea trying to negotiate whatever scraps of capacity remain.
⬤ Google recently learned this lesson the hard way. The company hit a wall when trying to source memory for its TPU accelerators, which currently rely on Samsung Electronics for about 60% of their HBM supply. When Google reached out to SK hynix and Micron looking for more, both said they had nothing available. The fallout was swift—Google fired the procurement managers responsible for not securing supply agreements earlier.
Meanwhile, the tech giants are bulking up their Asia-based sourcing operations, hiring commodity and memory specialists in Korea, Taiwan, and Singapore to stay closer to Samsung, SK hynix, and other regional chipmakers.
⬤ This matters because access to AI-grade memory has become a strategic chokepoint for companies building out AI platforms. For Microsoft and Google, supply constraints could affect everything from capital spending to cloud service rollouts. The broader takeaway: semiconductor supply-chain bottlenecks aren't going away, and the scramble for HBM and DRAM will likely continue shaping investor sentiment across the tech and AI sectors.
Saad Ullah
