There's a severe supply crunch for memory chips. Companies are scrambling to secure capacity wherever they can get it, and if that means they have to make deals not originally planned, so be it.

That might be the case with the rumored partnership between ByteDance, the Chinese firm behind TikTok, and Samsung Foundry. It's claimed that ByteDance may utilize Samsung's foundry for the production of its new AI chip.

Reports claimed that ByteDance is developing a new AI chip in partnership with Broadcom. The plan may have been to get it manufactured at TSMC but recent reports claim that the decision has been made to go with Samsung Foundry instead.

Samsung is now expected to deliver sample chips by the next of March. If it all goes well, ByteDance could have Samsung make 100,000 units of the chip this year, with the production ramping up to over 350,000 units in the future.

The current situation in the memory market has given Samsung leverage that other memory supplies don't really have. It has built a massive business from the ground up just to make chips for other companies. Samsung can essentially dangle the promise of memory supply as long as the client gives some business to its foundry.

This has been highlighted in recent speculation out of South Korea as well, that ByteDance is showing interest in Samsung's foundry services just so it can secure memory supply from the company.

Nothing wrong in that, after all, Samsung had built all of these businesses to be a one-stop solution for companies that require memory and chipmaking in the first place. The current market dynamics just work out very well in its favor.