Report: Samsung in talks with Google and Microsoft for long-term storage chip contracts, with prepayments exceeding $10 billion

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As storage chips become the key bottleneck for AI data center expansion, technology giants are facing an increasingly urgent need for stable supply.

According to EBN News, Samsung Electronics is currently negotiating long-term supply agreements with Google and Microsoft. Sources revealed that Samsung is discussing a prepayment arrangement of more than $10 billion with Microsoft; if the purchase volume falls short of the agreed amount, the difference 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 agreement is implemented, storage manufacturers will gain visibility of demand for over three years, which will help curb sharp price fluctuations, support stable profit margins, and drive more certainty in capital expenditure expansion.

Agreement Structure: Volume-Price Linkage, Prepayment Securing Execution

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

Within this framework, tech giants will make large prepayments to Samsung. If they fail to fulfill the agreed purchase volume over the three- to five-year agreement period, the unfulfilled portion will be deducted from the prepayment. Sources say the prepayment scale discussed between Samsung and Microsoft exceeds $10 billion.

EBN News specifically points out that the key feature of this kind of agreement is its "binding" nature. Similar agreements were reached around 2019, but due to the lack of enforcement mechanisms, customers could unilaterally cancel orders. The agreement under current discussion is designed to ensure enforcement through large prepayments.

Micron Discloses Its First Five-Year Strategic Customer Agreement

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

EBN News, citing industry sources, states that storage suppliers are expected to sign long-term supply agreements with major tech companies in the first half of this year.

Micron's capital expenditure plan confirms the direct impact improved demand visibility has on investment decisions—the company has announced a capital expenditure plan exceeding $25 billion for fiscal 2026, almost double the $13.8 billion from the previous fiscal year. EBN News points out that if Samsung's long-term agreement comes through, its capital expenditure scale is also set to expand further.

Deepening HBM Customization, Continued Growth Expected for Long-Term Demand

According to News Tomato, the evolving market structure is driving the popularity of long-term contracts more deeply.

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

Historically, the memory industry has long been plagued by cyclical woes—frequent mismatches between large-scale capacity expansions and demand fluctuations have led to volatile price swings. If this prepayment-centered long-term contract model is established, it will provide an unprecedented demand-anchoring mechanism for the industry, thereby reducing uncertainty on both the supply and demand sides.

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