[Edaily Cho Yong Seok Reporter Choi Oh-hyun] Samsung Electronics announced that it has signed long-term supply agreements (LTAs) for memory chips with 10 major customers and is currently in negotiations with an additional 10. As the customer base for these long-term contracts expands to include sectors such as mobile and automotive, next year’s supply of High-Bandwidth Memory (HBM) has already been fully booked. To meet growing demand for semiconductors, Samsung Electronics is expanding investment in new factories in South Korea and the U.S. and is also pursuing additional shareholder returns, including large-scale share buybacks and cancellations.

During its third-quarter earnings conference call on the 29th, Samsung Electronics stated, “We have already finalized contracts with 10 major customers,” adding, “As of now, we are in negotiations for multi-year contracts with another 10 major customers. Negotiations with some of these customers are already in the final stages.”

The range of customers seeking long-term contracts is also diversifying. Samsung Electronics explained, “The customer base for multi-year supply contracts is expanding beyond companies directly linked to the proliferation of AI services—such as hyperscalers and server manufacturers—to include a diverse range of customers across sectors including mobile, automotive, and networking.”

The company further emphasized, “The likelihood of achieving our target of having multi-year supply contracts account for 60–70% of our production capacity by 2030 is becoming increasingly tangible,” adding, “Once multi-year supply contracts become widespread, they will greatly contribute to establishing a stable, contract-based business model in the long term.”

Samsung Electronics operates its multi-year supply contracts on a rolling basis, extending the contract periods through annual negotiations. The company stated, “We are in the final stages of negotiations with some customers whose contracts have already expired regarding additional contract extensions,” adding, “The demand for additional contract extensions currently received from customers also significantly exceeds our previous expectations.”

Requests for additional supply beyond existing contract volumes are also continuing. Samsung Electronics explained, “We have received requests for additional supply even for existing contract periods and are reviewing mid- to long-term production feasibility,” but added, “As availability is currently insufficient, we are examining various supply response scenarios, such as adjusting product mix across applications.”

The company forecast that the memory supply shortage will continue into 2028. Samsung Electronics stated, “In 2027, unprecedented strong demand for memory will continue due to the accelerating competition to build AI infrastructure and the proliferation of personal AI agents,” and added, “Based on a synthesis of opinions from various market research firms, this tight supply situation is expected to persist into 2028.”

Samsung Electronics believes that even if capital expenditures increase, it will take time for actual production volumes to expand. The company explained, “A significant portion of the expected increase in capital expenditures is allocated to securing new space, and the scale of capital expenditures tends to appear inflated due to higher construction costs per unit of space compared to the past.” It added, “Considering the long lead time from new fab construction to wafer production, it appears unlikely that the increase in capital expenditures in 2027 will substantially contribute to production volume growth in 2028.”

Regarding HBM, Samsung Electronics emphasized that it has already finalized volume negotiations for next year. The company explained, “Negotiations for 2027 HBM supply volumes have been completed at target price levels that reflect the competitiveness of our products, and these volumes are already sold out,” adding, “We continue to receive requests from major customers for additional increases in HBM supply.”

Samsung Electronics explained that HBM4 revenue in the third quarter of this year more than tripled compared to the previous quarter, and HBM4’s share of total HBM revenue expanded to around 60 percent. The company stated, “Our goal of securing an HBM market share equivalent to our overall DRAM market share by the second half of this year appears to have already been achieved in the third quarter.”

In the foundry (semiconductor contract manufacturing) sector as well, the company is pushing ahead with expanded investment to meet growing demand for leading-edge processes. Samsung Electronics stated, “Currently, the pace of expanding production capacity for leading-edge processes is not keeping up with the actual increase in demand,” adding, “We are expanding investments in new fabs in the U.S. and South Korea to respond in a timely manner to the rapidly growing 2-nanometer AI and high-performance computing (HPC) markets and customer demand.” A “fab” refers to a semiconductor manufacturing plant.

The first fab in Taylor, Texas, has begun cleanroom operations and equipment installation. The company explained, “Progress is proceeding normally according to schedule, including wafer loading for line setup and the dispatch of specialized personnel from headquarters,” adding, “We are reviewing plans to expand production capacity, including the construction of additional fabs, to meet future global customer demand.”

The company expects the number of 2-nanometer process orders this year to more than double compared to last year. Samsung Electronics noted, “Following the second quarter, we secured 2-nanometer orders from major cloud service providers and AI/HPC customers in the third quarter as well,” and projected that “next year, the share of HPC revenue will expand to exceed 50% of the total.”

Regarding shareholder returns, the company stated that out of this year’s total return budget of 90 trillion to 110 trillion won, 55 trillion to 75 trillion won remains available. This figure excludes the 35 trillion won that has already been disbursed or approved, including the 30 trillion won cash dividend approved by the board of directors that day. Samsung Electronics stated, “We plan to return the remaining funds to shareholders through cash dividends as well as a significant buyback and cancellation of our own shares.”