After SK Hynix and Samsung’s $700 billion investment, Bernstein declares: A storage pullback is a buying opportunity.

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At the AI summit in San Francisco hosted by the Korean government, global storage giants and chip designers collectively signed long-term cooperation agreements totaling hundreds of billions of dollars. The AI computing power supply chain is shifting from "on-demand procurement" to "ultra-long-term capacity locking."

SK Hynix and NVIDIA signed a letter of intent worth more than $500 billion, covering storage supply and a planned 2GW Vera Rubin DSX AI factory project to be launched for SK Telecom in 2027.

Samsung Electronics reached a $200 billion strategic memorandum with Broadcom, locking in high-bandwidth memory (HBM) supply and advanced foundry services at 2nm and below until 2030.

After the announcement of these agreements, renowned institution Bernstein reiterated its bullish stance on the storage sector, maintaining “outperform” ratings for Samsung Electronics, SK Hynix, and Micron Technology, and noting that the recent correction in the sector provides a "good entry opportunity."

Two Mega Deals Secure Long-Term Capacity

The letter of intent between SK Hynix and NVIDIA is the largest single agreement disclosed at this summit.

The Bernstein analyst team led by Mark Li pointed out that this storage partnership covers "long-term technology development and stable supply of next-generation AI memory," aimed at helping SK Hynix "expand its growth base."

It is reported that the SK Group also plans to seek an additional $250 billion in global storage supply partnerships over the next five years, further consolidating its core position in the AI storage supply chain.

The memorandum between Samsung and Broadcom covers two major areas: storage (including HBM) and foundry. The foundry portion will focus on 2nm and even more advanced process technology, using advanced packaging solutions compared by analysts to TSMC’s CoWoS (Chip-on-Wafer-on-Substrate).

The agreement extends to 2030, providing Samsung's foundry business with ultra-long-term demand visibility.

Bernstein: Storage Is More Important to AI Than Logic Chips

Bernstein clearly pointed out in its report that the announced contract amounts are mainly targeted at the storage segment, reflecting the urgent need of NVIDIA and Broadcom to "secure storage supply."

The analysts provided a set of reference data: the market consensus expects global annual storage revenue in both 2027 and 2028 to reach about $1.3 trillion. Although Bernstein states that it "cannot quantify the impact of these agreements precisely," the scale of the related numbers compared to industry revenue expectations further confirms the key importance of storage chips in AI infrastructure.

Bernstein believes that storage chips are more important to AI than logic semiconductors. Based on this judgment, the institution maintains its "outperform" ratings for Samsung, SK Hynix, and Micron.

As for TSMC, Bernstein believes the impact of these agreements "should be negligible" because it is still uncertain whether Broadcom will actually manufacture AI ASICs at Samsung, and TSMC’s capacity demand queue remains full.

In the NAND sector, long-term competitive pressure from China cannot be ignored. Based on this view, Bernstein gives Kioxia an "underperform" rating.

Agreements Ease Supply Anxiety for NVIDIA and Broadcom

For NVIDIA and Broadcom, both chip designers, downstream AI-related growth guidance is strong, but anxiety about upstream storage capacity supply is equally real.

Bernstein points out that the new partnerships help alleviate these two companies’ concerns on the supply side.

The agreements disclosed at this summit are essentially a kind of "risk hedging" at the supply chain level—AI computing power demanders lock in future capacity through ultra-long-term contracts, thereby eliminating supply uncertainty of key materials in their expansion strategies. For investors, this trend means that the revenue visibility of storage giants is undergoing a qualitative improvement.

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