The move follows intense competition for high-bandwidth memory (HBM), a key component for AI accelerators and data centres.
Google’s primary HBM supplier, Samsung Electronics, could not meet rising demand, while alternative suppliers had already sold out capacity.
The shortage has forced Big Tech firms, including Microsoft, to negotiate directly with Asian chipmakers to lock in future supply.
Memory chips have become a hot topic due to the global shortage. This is putting pressure on Big Tech, with Google reportedly becoming the latest company to feel the effects as competition grows. According to South Korea’s Seoul Economic Daily, the tech giant has fired senior procurement executives in Korea for failing to secure long-term supplies of high-bandwidth memory, a critical component used in AI accelerators and data center infrastructure.
SurveyMemory chips have become one of the most valuable and constrained resources in the tech industry, owing to the shortage, which is primarily caused by the explosive demand for artificial intelligence workloads. HBM, along with DRAM and enterprise-grade solid-state drives, is required for training and operating large AI models. Even cutting-edge AI chips struggle to operate at scale in the absence of sufficient memory. Companies that did not lock in contracts early are now facing severe bottlenecks due to faster-than-expected demand.
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According to the report, Google relies heavily on Samsung Electronics for HBM used in its in-house Tensor Processing Units, sourcing a big chunk of its supply from the Korean giant. When demand exceeded expectations, Google reportedly approached SK Hynix and Micron for additional capacity, only to be informed that production for the near future was already fully allocated. Internally, management is said to have held procurement teams accountable for failing to anticipate the crunch sooner.
Not only Google, but also Microsoft executives have travelled to South Korea to negotiate directly with semiconductor suppliers, indicating a tense situation. According to reports, the negotiations broke down when suppliers refused to accept Microsoft’s proposed terms.
With only three companies worldwide capable of producing the most advanced AI-grade memory chips, SK Hynix, Samsung Electronics, and Micron, supply for the coming year is expected to be effectively sold out. As a result, large technology companies are increasingly stationing senior purchasing managers in Asia, particularly in South Korea, Taiwan, and Singapore, to gain greater control over negotiations and reduce supply chain risks.
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Ashish Singh
Ashish Singh is the Chief Copy Editor at Digit. He's been wrangling tech jargon since 2020 (Times Internet, Jagran English '22). When not policing commas, he's likely fueling his gadget habit with coffee, strategising his next virtual race, or plotting a road trip to test the latest in-car tech. He speaks fluent Geek. View Full Profile
