Memory: What do New Memory LTAs mean for sustainability of earnings and multiples? Raising SNDK TP to $3000

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Memory: What do New Memory LTAs mean for sustainability of earnings and multiples? Raising SNDK TP to $3000

30 June 2026

U.S. IT Hardware

Memory: What do New Memory LTAs mean for sustainability of

earnings and multiples? Raising SNDK TP to $3000

The paradigm of memory contracts has changed. New Memory LTAs (Long-term agreements) Mark C. Newman

+1 212 845 7822 are different. This note analyzes what we know from SNDK, MU and others, why things are

mark.newman@bernsteinsg.com different, and what this means for sustainability of earnings and PE multiples.

April Li Memory and Semiconductor investors are dubious on long-term agreements

+1 917 344 8339 (LTAs) for good reason. The way old LTAs were written, particularly in memory, was april.li@bernsteinsg.com

extremely lopsided in favor of the customer, but these New Memory LTAs have three

Phoebe Sun key differences: prices fixed or range bound; upfront financial commitments to lock-in

+1 917 344 8481 customers and protect downside; and long contract terms (3-5 years).

phoebe.sun@bernsteinsg.com

Upfront financial commitments provide real downside protection and aren’t the

same as previous take or pay arrangements. One major misconception of these new

financial commitments is to view it as a static portion of the contract. In reality, this ratio

is dynamic. As time passes and revenue gets recognized, the remaining contract value

declines. Therefore, the same amount of financial guarantee is applied to a progressively

smaller remaining obligation, increasing its relative coverage of the LTA tail and effectively

strengthening protection in the latter part of the contract (when it is more likely to be

needed!). We believe this is not understood by the Street.