[News] Samsung Targets 60–70% Capacity Under LTAs; Five Key Customers Reportedly Include AWS, Microsoft, Google

Samsung’s earnings call delivered a clear vote of confidence in sustained AI memory demand, as the company disclosed, for the first time, concrete progress on its long-term agreements (LTAs). While Micron expects its Strategic Customer Agreements (SCAs) to account for around 50% of long-term memory sales, Samsung is taking a more aggressive approach, aiming to allocate 60% to 70% of total production capacity (CAPA) to long-term contract volumes, according to ZDNet.

News1 adds that Samsung has already secured LTAs with five major global data center clients, while talks with five more large-scale players are nearing completion. Seoul Economic Daily reports that the group is expected to include the three largest cloud providers—AWS, Microsoft, and Google Cloud—along with Meta and Oracle.

LTA Model Evolves Beyond DRAM

Samsung, per the News1 report, explained that its multi-year LTAs follow a rolling five-year structure, with contract terms renewed annually through negotiations. The LTA model is also expanding beyond DRAM, with Samsung beginning to extend long-term supply agreements into the NAND flash business, ZDNet reports.

Samsung also disclosed LTA mechanisms that mirror those outlined by SK hynix. While SK hynix said its agreements include customer deposits and other binding provisions to strengthen contract execution and improve long-term demand visibility, ETNews reports that Samsung has already secured upfront payments covering roughly one-quarter of contracted volumes to reinforce customers’ purchase commitments.

Samsung’s LTAs also feature price floor mechanisms for commodity memory products, helping cushion earnings against sharp market downturns, ETNews adds.

Even with LTAs in place, demand remains robust, as many additional customers continue to seek agreements and existing contract customers request further supply, News1 says. The memory giant reportedly expects the AI memory shortage to worsen next year, with the supply-demand imbalance extending through 2028.

LTA Expansion Could Reshape Pricing Dynamics

Invest Chosun reports that LTA volumes are expected to account for more than 30% of server DDR5 shipments in H2 2026. Including contract-based businesses such as HBM, analysts cited by the report estimate that nearly half of global DRAM capacity could be locked under long-term agreements by 2027, further accelerating the shift toward contracted supply.

The growing share of LTA-backed supply could also reshape memory pricing dynamics. According to TrendForce, several U.S.-based CSPs have entered into multi-year LTAs, which restrict suppliers from raising prices for these clients. Consequently, TrendForce predicts that server DRAM contract prices will rise by 13–18% quarter-over-quarter in 3Q26.

Read more

• [News] Samsung’s DS Unit Delivers 99.7% of Q2 Profit amid Memory Boom; HBM4 Revenue Reportedly to Triple in Q3
• [News] SK hynix Posts Record 2Q Results but Misses Estimates Reportedly Due to Conservative Pricing; Completes 10 LTAs

(Photo credit: Samsung)