Memory: New Memory LTAs part 2 - Case studies from Microchip and other Semiconductor LTAs - What‘s different this time?

研报英文原文证据摘录

Memory: New Memory LTAs part 2 - Case studies from Microchip and other Semiconductor LTAs - What‘s different this time?

9 July 2026

U.S. IT Hardware

Memory: New Memory LTAs part 2 - Case studies from Microchip

and other Semiconductor LTAs - What's different this time?

Last week we published an analysis on New Memory LTAs (Long-term agreements), why Mark C. Newman

+1 212 845 7822 they are different and what this means for sustainability of earnings. Today’s part 2 dives

mark.newman@bernsteinsg.com deeper into Case Studies from the Semiconductor industry to compare and address

questions and feedback from investors.

April Li

+1 917 344 8339 Historically, long-term agreements in semiconductors and memory functioned april.li@bernsteinsg.com

primarily as a buyer's tool: Customers used LTAs to secure guaranteed volume,

Phoebe Sun while sellers had little structural leverage of their own. Even when suppliers held some

+1 917 344 8481 negotiating power, contracts were largely limited to two structures: take-or-pay, where a

phoebe.sun@bernsteinsg.com buyer promises to either accept a minimum volume at a pre-agreed price or pay a penalty

for any shortfall; and so-called "non-cancelable" orders, a buyer's promise not to cancel

delivery that, as later cycles would prove, buyers could and did cancel in practice. Both

structures offered sellers little real downside protection, since neither carried an

upfront financial commitment to compensate the supplier if a buyer walked away; the

only remedy was to sue for damages, a process that was slow, expensive, and often hollow

if the buyer was no longer solvent by the time judgment was reached.

Two case studies illustrate exactly how previous LTA structures failed in practice:

1. Microchip / Analog Semiconductors; and 2.