Report: Samsung is negotiating long-term agreements for memory chips with Google and Microsoft, with advance payments exceeding $10 billion

As storage chips become a critical bottleneck in the expansion of AI data centers, the demand from tech giants for stable supply is increasingly urgent.

According to EBN News, Samsung Electronics is currently negotiating long-term supply agreements with Google and Microsoft. Sources reveal that Samsung is discussing a prepayment arrangement of over $10 billion with Microsoft, where any shortfall in procurement volume will be deducted from the prepayment.

The significance of this agreement structure goes beyond the transaction itself. Analysts point out that if the long-term agreements are realized, storage manufacturers will gain over three years of demand visibility, which will help curb price volatility, support stable profit margins, and promote more certain capital expenditure expansion.

Agreement Structure: Volume-Price Linkage, Prepayment Binding Execution

According to EBN News, the most likely contract model under discussion is to lock in procurement volumes over several years while linking pricing to the spot market—if spot prices deviate from the preset range, the contract price will be adjusted accordingly.

Under this framework, tech giants will make large prepayments to Samsung. If the agreed procurement volume is not met during the three to five-year agreement period, the unfulfilled portion will be deducted from the prepayment. Sources indicate that the prepayment scale discussed between Samsung and Microsoft exceeds $10 billion.

EBN News specifically points out that a key feature of such agreements is their "binding" nature. Similar agreements were reached around 2019, but due to the lack of enforcement mechanisms, customers could unilaterally cancel orders. The agreements currently under discussion are designed with large prepayments to ensure the contracts are effectively executed.

Micron Discloses First Five-Year Strategic Customer Agreement

Samsung is not alone. According to ZDNet, Micron Technology is also advancing similar arrangements and has disclosed its first five-year strategic customer agreement (SCA) in its Q2 fiscal 2026 report.

EBN News cites industry sources stating that storage suppliers are expected to finalize long-term supply agreements with major tech companies in the first half of this year.

Micron's capital expenditure plan confirms the direct impact of improved demand visibility on investment decisions—the company has announced a capital expenditure plan exceeding $25 billion for fiscal 2026, nearly doubling from $13.8 billion in the previous fiscal year. EBN News notes that if Samsung's long-term agreements are ultimately realized, its capital expenditure scale is also expected to expand further.

Deepening HBM Customization, Long-Term Demand Expected to Continue Growing

According to News Tomato, the evolution of market structure is driving the proliferation of long-term contracts from a deeper level.

With the launch of next-generation products like HBM4, the share of customized HBM in the overall storage market will continue to rise. Customers are increasingly collaborating with suppliers from the design stage, a trend that is expected to further expand the demand for three to five-year long-term contracts.

Historically, the storage industry has long been trapped in cyclical dilemmas—large-scale capacity expansions and frequent demand fluctuations have led to dramatic price spikes and drops. If the long-term agreement model centered on prepayments is established, it will provide the industry with an unprecedented demand anchoring mechanism, thereby synchronously reducing uncertainty on both the supply and demand sides