[Edaily Reporter Kim Hyun-ah] #KT has taken steps to stabilize its supply chain by providing advance payments to its partners in response to soaring memory prices caused by global supply chain disruptions and the spread of AI. This is a preemptive measure aimed at alleviating the financial burden on partners and preventing production disruptions amid intensifying competition for key components due to expanded AI investments.

KT announced on the 16th that it has provided advance payments to secure memory chips for partners facing difficulties due to global supply chain disruptions and rising raw material prices.

Global supply chain uncertainty is growing as geopolitical risks in the Middle East, high exchange rates, and rising raw material prices converge. Furthermore, as competition among global Big Tech companies to invest in AI data centers intensifies, demand for memory chips such as DRAM and NAND flash is surging, increasing upward pressure on prices.

KT determined that this market environment is unlikely to resolve in the short term and has therefore initiated advance payment support for set-top box partners significantly affected by rising memory prices. The company provided funding to enable partners to proactively secure a supply of memory sufficient for approximately six months of use.

Thanks to this measure, partners can secure inventory before prices rise, thereby reducing their financial burden, while KT has also ensured a stable supply of devices necessary for customer services, such as Genie TV set-top boxes.

KT plans to consider expanding this support depending on market conditions. In particular, this initiative is considered significant as it goes beyond simple financial support to serve as a mutually beneficial cooperation model for jointly managing supply chain risks.

KT is also operating various mutual growth programs to stabilize the supply chain. In 2023, it became the first among the three major domestic telecommunications companies to introduce a linked payment system, which reflects fluctuations in raw material prices in supply prices. Additionally, to enhance business predictability for partner companies, it has extended the demand forecasting period from the previous 4–6 months to a maximum of 1–3 years.

For items facing significant supply chain issues, the company is promoting the transition to long-term contracts spanning two to three years and is supporting partners’ working capital needs through a mutual growth cooperation fund. Additionally, KT is running programs to strengthen partners’ competitiveness, including joint participation in overseas trade shows, export consultation sessions, and AI transformation (AX) training.

Kwon Hye-jin, Head of KT’s SCM Division (Senior Vice President), stated, “The recent supply chain crisis is a structural challenge that cannot be resolved through the efforts of individual companies alone,” adding, “We will continue to expand our support to strengthen the practical competitiveness of our partners and ensure stable service provision, including support for advance memory purchases.”