As the AI demand surge extends the memory chip super-cycle, analysts are warning about a growing risk that could dent the sector's momentum. The reliance of major tech customers on external financing is drawing close scrutiny, even as top manufacturers lock in demand through long-term supply agreements.

With AI-driven investment continuing to pour into hyperscale data centers, the three leading memory chip producers have secured stable demand by signing supply contracts lasting at least five years with key clients. However, analysts caution that the possibility of renegotiation should not be overlooked if memory demand ultimately cools down, as reported by Bloomberg and industry sources. The combined annual operating profit for Samsung Electronics, SK Hynix, and Micron is expected to surge exponentially, from 105 trillion won ($78.5 billion) in 2025 to 795 trillion won in 2026 and further to 1,284 trillion won by 2027.

The escalating demand for AI services has led big tech firms to continuously invest in expansive data centers, propelling the trio into an era of unprecedented growth. Yet, analysts point out that the increasing share of external funding among these tech giants warrants careful attention. Should these companies scale back investment due to financial market conditions, the memory sector could experience downstream effects.

Kim Jeong-hun, a senior analyst in the corporate ratings division at Korea Ratings, said during a credit seminar on Thursday, that approximately 50% of the projected $2.9 trillion capital expenditure in the AI sector between 2025 and 2028 is expected to be financed by external funds. "This makes the industry increasingly sensitive to financial market conditions, including interest rates, capital market liquidity, and investor risk appetite," he stated. Consequently, analysts believe the memory market's fate now hinges not only on actual supply and demand dynamics but also on customers' creditworthiness and financing structures, making the industry more vulnerable to broader financial market swings.

The memory market has historically been plagued by volatility, with cycles swinging in line with demand for consumer products like smartphones and PCs. However, the recent supply shortage triggered by AI demand has prompted the three memory giants to mitigate this volatility and enhance business stability by entering long-term supply agreements (LTAs) of five years or more. During its second-quarter earnings call in July, Samsung Electronics said it is negotiating long-term contracts with customers who can "embrace confirmed future demand and highly mutual contract fulfillment obligations," adding that agreements have already been reached with the world's top five data center clients.

SK Hynix highlighted that it has "increased the visibility and reliability of customers' mid-to-long-term demand plans by introducing financial mechanisms, such as deposits, to support contract fulfillment," and is "discussing various methods with customers to manage price fluctuations." Micron, meanwhile, has been expanding its strategic customer agreements, which are similar to LTAs, under which it supplies memory over five years in exchange for upfront payments. The company has stressed that customers must meet their contractual payment obligations even if they do not ultimately purchase the committed memory volume.

However, Kim cautioned that "long-term supply agreements can improve visibility into short-term volume and pricing, but they do not eliminate customer credit risk or financing risk." Analysts warn that if actual memory demand falls short of contractual volumes, inventory could accumulate, potentially amplifying any market correction. "In an environment where reliance on external financing is increasing, if clients' creditworthiness deteriorates or capital market conditions tighten, making financing difficult, renegotiating LTA terms cannot be ruled out," Kim said. He added that "ultimately, long-term supply agreements do not erase cyclicality—they smooth short-term fluctuations and shift the path and timing of risk," emphasizing that financial buffers are essential for the credit profiles of memory chip makers.