Samsung Electronics 2Q26 Earnings Call Q&A Q. Could you provide an update on LTAs? A. Regarding multi-year memory supply agreements, demand for securing medium- to long-term AI service infrastructure is surging, while the market increasingly expects the memory supply shortage to persist for an extended period. As a result, many customers are requesting LTAs. These customer requests align with our objective of hedging medium- to long-term business risks. We are therefore prioritizing negotiations with customers that have firm future demand and are capable of entering into agreements with strong, mutually binding commitments to contract performance. However, customers are requesting additional supply across both DRAM and NAND, while market prices continue to rise. With virtually every customer seeking an LTA, it is difficult to accommodate all supply requests within our available capacity. To maintain sufficient supply flexibility to serve customers outside multi-year agreements, we plan to allocate approximately 60–70% of our total capacity to LTAs. Additional customers are seeking LTAs, while some customers that have already signed agreements are requesting increased volumes. To provide further detail, our LTAs generally have a five-year base term and follow a rolling structure under which additional periods are added through negotiations in subsequent years. By establishing a five-year rolling-contract structure and securing a certain proportion of our business through committed orders, we expect to achieve a more stable business model. We have already completed agreements with five major global data center customers and are in the final stages of negotiations with five additional large customers. We expect the number of LTA customers to increase over time. Once the agreements currently under negotiation are finalized, we expect LTA volumes to comfortably reach 60–70% of our medium- to long-term production plans for both DRAM and NAND. We also plan to discuss additional contract requests and are reviewing various medium- to long-term capacity-expansion scenarios. To strengthen the binding nature of these multi-year supply agreements, the contracts include substantial advance payments that are held over multiple years. We have already received approximately one-quarter of the agreed advance payments, and the total amount is expected to increase as additional agreements are signed. We ask for your understanding that we cannot disclose the amount of the advance payments due to confidentiality agreements with customers. Regarding the contract model, the agreements incorporate pricing mechanisms designed to offset future risks to an appropriate degree. Product pricing varies depending on each customer’s product portfolio, and contract terms are determined through mutual consultation with customers. For commodity products, pricing is structured to sufficiently hedge future investment risks arising from fluctuations in market prices. Our core principles are to secure medium- to long-term demand visibility, support the healthy development of the AI industry, and maintain a balanced customer portfolio. These principles are also reflected in our LTAs. Given the memory industry’s longstanding pattern of repeated upturns and downturns, expanding the proportion of business covered by LTAs should significantly improve our business stability and visibility. We will continue to expand our portfolio of AI applications with strong medium- to long-term demand visibility and maintain our leadership in the memory market.