Long-term agreements are reshaping the memory cycle in ways most investors still haven't priced in.
Samsung is pushing three- to five-year contracts with the top five hyperscalers and wants two-thirds of output locked in — some with price floors and prepayments. SK Hynix has closed LTA talks with roughly ten core customers, tying volume to product roadmaps so it can plan DRAM and HBM lines years ahead. $MU has sixteen strategic customer agreements running through 2030, many with take-or-pay clauses. Auto deals typically span three years. Those pacts already cover about 20% of DRAM shipments and a third of NAND; Micron wants at least half of revenue inside SCAs. Nanya has roughly half of capacity under contract, terms ranging from one quarter to several years.
Here's the twist: even when capacity additions land in 2027 and 2028, much of that new output may already be spoken for. Spot supply could stay tight far longer than in prior cycles.
If two-thirds of bits sit under multi-year deals with hyperscalers and auto OEMs, does the next downturn even show up on the spot tape? The old playbook assumed elastic supply meeting elastic demand. That world is gone.
$MU $SKHY $SNDK
Samsung is pushing three- to five-year contracts with the top five hyperscalers and wants two-thirds of output locked in — some with price floors and prepayments. SK Hynix has closed LTA talks with roughly ten core customers, tying volume to product roadmaps so it can plan DRAM and HBM lines years ahead. $MU has sixteen strategic customer agreements running through 2030, many with take-or-pay clauses. Auto deals typically span three years. Those pacts already cover about 20% of DRAM shipments and a third of NAND; Micron wants at least half of revenue inside SCAs. Nanya has roughly half of capacity under contract, terms ranging from one quarter to several years.
Here's the twist: even when capacity additions land in 2027 and 2028, much of that new output may already be spoken for. Spot supply could stay tight far longer than in prior cycles.
If two-thirds of bits sit under multi-year deals with hyperscalers and auto OEMs, does the next downturn even show up on the spot tape? The old playbook assumed elastic supply meeting elastic demand. That world is gone.
$MU $SKHY $SNDK