JPM Asia Technology

J P M O R G A N Asia Pacific Equity Research 23 August 2026

Asia Technology Key Takeaways from J.P. Morgan Asia Tech Tour (Seoul Part): Memory Semiconductors

We hosted major memory makers (SEC, SKH, Kioxia, and NYT) and memory Technology - Semiconductors supply chain players (FADU and EO Technics - both Not Covered) at our JPM Asia Jay Kwon AC Tech Tour (Aug 20-21) with 50+ investors joining our conference. Key FAQs from ( investors were centered around the shareholder return policy, LTA strategy, memory S-D, HBM pricing negotiations, and new emerging NAND technology. J.P. Morgan Securities (Far East) Limited, Seoul Branch We sense investors remain constructive on mid-to-long term fundamentals, while Sangsik Lee maintaining a more measured view on memory stock prices amid a cautious stance ( on LTA and limited visibility on shareholder returns. SEC (note) and SKH (note) both surprisingly reported new shareholder return programs this week, and J.P. Morgan Securities (Far East) Limited, Seoul Branch notwithstanding the expectations, we believe both memory makers are making a commitment to improving shareholder value (i.e. dividends, share buyback/ Neelay Y Kamath ( cancellation), and we maintain our OW view on the sector. J.P. Morgan India Private Limited • Shareholder return policies have become the center of debate topics. Key Mio Shikanai FAQs from investors were the magnitude of the FCF payout and the ( willingness to make greater return commitments akin to those of US peers (i.e. 100% of excess cash), albeit the definition of excess cash remains opaque, in JPMorgan Securities Japan Co., Ltd. our view. Following SKH’s W40trn share buyback and cancellation announcement (report), management reiterated lifting the shareholder return pool from <50% to over 50% of accumulated FCF as a sign of prioritizing shareholder value and suggested further update at its 3Q26 earnings. Kioxia echoed the view by guiding for a progressive dividend starting within this financial year, with potential updates at its Sep-Q earnings conference and higher FCF payout is a feasible policy. After our conference on Friday, Samsung announced to return W90trn-W110trn shareholder return following its 50% FCF payout policy for 24-26E shareholder program (buyback/ dividend mix not finalized) and up to W30trn dividend payout in 3Q26 result, which we found the commentaries encouraging but not promising enough to meet the heightened investor expectation, in our view (report). There was limited discussion surrounding shareholder returns in our meeting with NYT, but we expect the company to continue with its previous minimum net profit payout policy. Overall, we walked away with encouraging signals from the memory makers on their commitment to shareholder returns and expect further updates in the next 3-6M. • LTA: 50%-70% volume coverage; A pillar for valuation-rerating. While we believe many investors trust the strong memory fundamentals for an extended period of years, we sense the stance on LTAs is still skewed to the downside. Memory makers reiterated that the LTAs will re-shape the business model allowing better demand foresight and less cyclicality given the ability to adjust capex/supply according to customers’ demand outlook. Volume coverage among memory companies was broadly in-line (SEC: maximum of ~70%; Hynix : over 50%; Kioxia: 50% of volume for ‘27-28; and NYT: 50%+ but less than 70%), while LTA contract duration terms differed by memory makers (SEC/SKH: up to 5 years; Kioxia: until FY28 but indiscussion of FY29/30; and NYT: majority <1 year contracts but aiming to target longer term contracts). Pricing details were not disclosed, but memory makers unaminously guided that the contract terms were favorable to the memory suppliers with sizable prepayment terms and stronger binding to both parties

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Jay Kwon AC Asia Pacific Equity Research ( August 2026 JPMORGAN

with greater order and procurement visibility. One may argue that LTAs cap the near-term ASP upside, but we believe LTAs serve a greater value in reducing the industry's cyclicality and would pave…