Analysts Debate How AI Memory Agreements Would Handle Demand Shifts

A recent debate between two semiconductor analysts over co-designed high-bandwidth memory (HBM) has focused attention on contract flexibility.

Samsung, SK hynix and Micron have signed long-term supply agreements with large cloud companies as demand for artificial intelligence infrastructure has lifted memory prices. The question of whether those agreements can support future sales and margins has also surfaced in coverage of Micron’s outlook and HBM demand.

At a Jan. 5, 2023, CES forum, onsemi CEO Hassane El-Khoury described the company’s long-term supply agreements as legally binding take-or-pay contracts. He said onsemi would not reopen pricing even if a customer found a supplier offering a price about 10% lower.

On Oct. 30, 2023, onsemi lowered its annual silicon carbide shipment outlook to more than $800 million from $1 billion after an automaker reduced demand. El-Khoury said the company did not want to leave the customer with unwanted inventory by forcing deliveries. In 2024, onsemi amended some agreements with strategic customers; in 2025, it changed delivery schedules or committed amounts under some contracts.

Microchip’s priority supply program required 12-month orders and generally barred cancellations or schedule changes unless the company raised prices. In November 2025, Microchip accepted some cancellations and deferrals. Some multiyear agreements remained active, with customers able to delay taking committed quantities by one to two years. The products covered by those agreements were not specified.

Citrini researcher Jukan has argued that co-design does not resolve who bears excess inventory if accelerator production falls. He used a hypothetical reduction from 1 million units to 800,000 to illustrate the question of who would absorb the remaining memory. Independent semiconductor analyst Damnang countered that customers and suppliers co-design next-generation HBM and three-dimensional stacked dynamic random-access memory (DRAM), and that switching suppliers could require compatibility work and revalidation.

Jukan views customer deposits and prepayments as a key safeguard because suppliers can use the cash to expand capacity. Publicly disclosed terms do not settle whether deposits are refundable, what penalties apply or how prices are set. Cloud companies’ AI spending plans and any disclosed delivery changes at memory suppliers are the next indicators to watch.