The "storage shortage" is getting worse! Technology giants rush to invest in SK Hynix to ensure supply, unprecedented scene.

According to media reports citing informed sources, global technology giants are competing to extend an "olive branch" to the South Korean storage giant SK Hynix, offering investments to build new production facilities and funding for expensive production equipment purchases, all in order to secure a lead in locking in the supply of storage chips. This phenomenon is unprecedented in the global storage chip industry, highlighting the severity of the current global chip shortage. With the boom in artificial intelligence, chip manufacturers are struggling to meet the surging market demand, and storage chips are crucial key components in AI data centers, smartphones, PCs, and other fields. According to sources, SK Hynix's customers have proposed various cooperation plans, including investing in dedicated memory production lines. Another proposal involves customers funding SK Hynix's purchase of equipment, such as ASML's extreme ultraviolet lithography machines. These devices are used to etch circuits on silicon wafers and can cost hundreds of millions of dollars per unit. Sources also revealed that some cooperation plans are targeting the first phase project of SK Hynix's large wafer factory in Longnei Industrial Park in South Korea, which will focus on producing DRAM memory chips in the future. However, sources also mentioned that SK Hynix is cautious about customer investments due to its sufficient funds. Such transactions could potentially make the company dependent on specific buyers and require them to supply chips at lower prices in exchange for "longer-term, more stable income guarantees." Sources stated, "Regardless of what plans the customers propose, the currently available production capacity is almost zero. Not even a small portion of the capacity can be allocated to specific customers." Boosted by the AI investment boom, this Asian company, the third-largest by market value (after TSMC and Samsung), has seen its stock price rise by 154% this year, reaching a historical peak. It is currently unclear which global technology giants have made investment proposals to SK Hynix. Last week, U.S. tech giants including Alphabet, Meta, and Microsoft announced plans to increase investment in AI infrastructure. "We are actively investing to meet our infrastructure needs," Meta said during its earnings call, adding that this includes "reaching agreements across the supply chain to secure components needed for future capacity." Microsoft also stated during its earnings call that capital spending for this year is expected to increase to $190 billion, with an additional $25 billion due to rising costs of components like chips. The current industry upswing is expected to last longer The influx of investment proposals from tech giants to SK Hynix is rare in the history of the storage chip industry. The industry has always experienced extreme cycles of prosperity and downturn. This has led chip manufacturers to believe that the current industry upswing is likely to last longer. Both SK Hynix and Samsung stated last month that the current shortage of memory chips will continue, as chip manufacturers need time to ramp up capacity to meet the "structural growth" in AI demand. "Due to the current supply constraints, we are unable to fully meet all customer demands," SK Hynix said at the time, adding that requests for long-term contracts to ensure supply are rapidly increasing. Memory chip manufacturers have always stated that multi-year contracts can help smooth demand fluctuations and reduce investment risks in this capital-intensive and cyclical industry. However, chip executives, investors, and analysts have raised questions about how to ensure customers do not cancel transactions and how to price them profitably. This article was originally published by "Cailian Press" and written by Chun Bian; Edited by Qiu Yi Feng.