In recent years, with the continuous increase in memory demand from servers and data centers, the DDR4 memory market has seen a supply shortage. Samsung, a global leading manufacturer of storage chips, originally planned to gradually cease production of DDR4 memory by the end of 2025. However, facing the current market situation, Samsung has had to adjust its strategy.

According to DigiTimes, Samsung has decided to slow down the shutdown process of DDR4 memory production and plans to sign long-term supply contracts with specific customers in the server field in the first quarter of 2026. These contracts will include Non-Cancellable, Non-Returnable (NCNR) clauses to ensure that Samsung maximizes its profits in capacity scheduling.

NCNR Contracts: Locking in Profits and Supplies

NCNR contracts have strong legal binding force in the memory industry. Customers must purchase a fixed quantity of products at the predetermined price and cannot modify the volume or cancel the order under any circumstances in the future. Such contracts typically arise when suppliers anticipate continuous price increases or supply tightness, and customers are willing to accept locked-in prices and quantities to secure long-term stable supplies.

The NCNR contracts that Samsung has signed with specific customers this time are mainly aimed at the server field. These customers have an urgent need for a stable supply of DDR4 memory and are willing to take on the risks associated with locked-in prices. Through this approach, Samsung can not only ensure the efficient utilization of its DDR4 production capacity but also lock in high profits amid market price fluctuations.

Current and Future Trends of the DDR4 Market

Currently, the spot price of DDR4 memory has soared to record highs, with the spot price of 16Gb DDR4 even reaching $60. This price has exceeded that of the same-specification DDR5 memory, indicating the strong market demand for DDR4. Although Samsung has decided to delay the shutdown of DDR4 production, the overall trend of industry capacity contraction has not changed.

According to industry analysis, the DDR4 market will still face a supply shortage in 2026, with prices likely to rise further. Samsung's adjustment of its strategy is more about maximizing short-term profits rather than a long-term revival of the DDR4 market. In the long run, the trend of technological iteration remains clear, with next-generation memory technologies such as DDR5 and HBM continuing to dominate the market.

Impact on the Consumer Market

It is worth noting that although Samsung has delayed the shutdown of DDR4 production, the additional capacity is mainly supplied to large enterprise customers such as servers and data centers, and the consumer market is unlikely to benefit. Ordinary consumers and downstream buyers targeting the consumer market are almost unable to obtain the qualifications for such long-term supply contracts. Moreover, since DDR4 capacity mainly comes from existing production lines, manufacturers like Samsung cannot easily expand capacity in the short term. This means that even though Samsung has released some DDR4 capacity, the market shortage will continue.

Conclusion

Samsung's decision to delay the shutdown of DDR4 production and sign NCNR long-term supply contracts is a rational choice to maximize profits in the current market environment. This strategy not only brings high short-term profits to Samsung but also provides stable supply guarantees for customers in the server field. However, in the long run, the overall shortage situation in the DDR4 market is difficult to completely relieve, and the trend of technological iteration remains clear.

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