Reports: Samsung in negotiations with Google and Microsoft on long-term storage chip agreements, advance payments exceed $10 billion

As storage chips become a key bottleneck in the expansion of AI data centers, tech giants’ demand 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, with any shortfall deducted from the prepayment if purchase volumes do not meet the agreed amount.

This agreement structure is more than just a single transaction. Analysts point out that if long-term agreements are implemented, storage vendors will gain over three years of demand visibility, helping to suppress sharp price fluctuations, stabilize profit margins, and support 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 purchase volumes over multiple years while linking pricing to the spot market—if spot prices deviate from the preset range, the contract price will adjust accordingly.

Under this framework, tech giants will pay Samsung large prepayments. If the agreed purchase volumes are not met within the three to five-year contract period, the unfulfilled portion will be deducted from the prepayment. Sources say the prepayment discussions between Samsung and Microsoft exceed $10 billion.

EBN News specifically notes that the key feature of such agreements is their “binding” nature. Similar agreements were reached around 2019, but lacked enforceable mechanisms, allowing customers to cancel orders unilaterally. The current negotiations aim to ensure contract enforcement through large prepayments.

Micron Discloses First Five-Year Strategic Customer Agreement

Samsung is not an exception. According to ZDNet, Micron Technology is also advancing similar arrangements and has disclosed its first five-year strategic customer agreement (SCA) in its Q2 FY2026 financial report.

EBN News cites industry sources saying that storage suppliers expect to complete long-term supply agreements with major tech companies in the first half of this year.

Micron’s capital expenditure plans confirm that increased demand visibility directly influences investment decisions— the company announced a capital expenditure plan of over $25 billion for FY2026, nearly doubling from $13.8 billion in the previous year. EBN News points out that if Samsung’s long-term agreement is finalized, its capital expenditure scale is also likely to expand further.

Deepening Customization of HBM, Long-term Demand Expected to Continue Growing

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

With the launch of next-generation products like HBM4, customized HBM will continue to increase its share in the overall memory market. More customers are collaborating with suppliers from the design stage, which is expected to further expand the demand for three- to five-year long-term contracts.

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

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