Morgan Stanley: Storage LTAs Are Rewriting Pricing Logic, Major Suppliers Vying to Lock in Long-Term Capacity

According to TechFlow Research, Morgan Stanley's August Global Technology Webinar pointed out that memory chip Long-Term Agreements (LTAs) are shifting from intention disclosure to substantive implementation, and pricing mechanisms are being rewritten. Samsung explicitly planned for the first time to include 60% to 70% of capacity into rolling five-year LTAs, with 5 contracts signed and 5 in final negotiation; clients include AWS, Microsoft, Google, Meta, and Oracle. Micron has signed 16 LTAs, receiving approximately $22 billion in prepayments and commitments. SanDisk locked over 50% of FY2027 wafer capacity, with a minimum revenue commitment reaching $93.9 billion. Kioxia targets to include 50% of sales volume into LTAs by 2028. Pricing is shifting from spot pricing to a two-way protection mechanism with price floors and ceilings, and clients need to provide prepayment deposits. The research report estimates that 3Q26 DRAM contract prices will rise QoQ by about 15% (lower than the expected 20%), NAND will rise by about 20%, with gains narrowing for both; it is expected to slow down further in 4Q26, but Morgan Stanley believes this does not mean the end of the cycle. Price protection mechanisms under the LTA framework are reducing the earnings volatility of memory manufacturers, and the market should no longer use the traditional commodity cycle framework to price memory stocks. Regarding SpaceX, Morgan Stanley maintains an Overweight rating and a $300 price target, with an end-2026 ARR target of at least $100 billion, and 4Q26 single-quarter ARR expected to be about $22 billion.