Global Memory Tech: Weekly theme: more LTA, MLCC/FC-BGA boom, spot price rally, Korea ETF 101

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Global Memory Tech

Weekly theme: more LTA, MLCC/FC-BGA

boom, spot price rally, Korea ETF 101

Industry Overview

LTA more meaningful, and it still offers ASP hike – no cap

Samsung Electronics (SEC) said 60-70% of its memory sales will be under LTA but with

favorable terms (price cut limit vs broadly open for price increase; e.g., sub-5% down

QoQ vs 10-20%+ increase). Interestingly, SEC’s LTA (mainly for US Big Tech) is mostly

for 5 years rolling; thus, 6th year can be added right after/before 1st year completion.

SEMCO and LGI more bullish on AI MLCC/FC-BGA

Korea’s two leading passive component suppliers, SEMCO (009150 KS) and LG Innotek

(LGI; 011070 KS), provided very bullish guidance for AI server-related MLCC and FC-BGA

demand at their 2Q earnings calls. What the management highlighted: (1) stronger order

under LTA; (2) large amount of prepayments (key financial resources for new fab

construction or capacity expansion; and (3) contract price increase through 2H and 2027.

SEMCO and LG Innotek reported more than doubled 2Q OP YoY even with mid-cycle

level of MLCC/FC-BGA margin. We assume further increase in ASP and volume through

2H26 and even 2027-28, given Big Tech’s strong commitment to use SEMCO/LGI’s new

capacity, particularly in Vietnam (new FC-BGA fab operations from mid- to late-2027).

DRAM/NAND spot rally continues ahead of IT peak season

Spot market sentiment remained positive to expect further price rally in August. Three

reasons: (1) chip order increase for inventory restocking; (2) many Tier-2 OEMs resuming

new smartphone/PC model launch targeting Sept/4Q despite high memory cost; and (3)

bottoming out China domestic smartphone shipment (only 17mn units in June vs normal

25-30mn; lean channel inventories). We also see minimal impact from China local

chipmakers’ capacity expansion – China-branded memory not commonly traded in the

spot market; even Korea/US/Japan chips not much available for white-box OEMs. This is

consistent with newly confirmed July contract price increase (TrendForce’s updated July

DRAM contract price: up low-teen% MoM or 30-50% QoQ but flat for NAND).

Korea ETF 101 webcast takeaways

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