美光长协的含金量：客户先押220亿美元，合同不可取消，还锁定「史上最赚钱」的毛利率

Original Author: Long Yue

Original Source: Wall Street News

Customers first pay $22 billion in deposits, sign irrevocable long-term contracts, and accept a pricing framework that is far more favorable to Micron than any period in history—these are the core terms of Micron's latest batch of long-term Strategic Customer Agreements (SCAs).

According to information from the Zhui Feng trading desk, on June 25, Barclays, Morgan Stanley, and JPMorgan collectively regarded these as "game-changing" agreements. In a research report, JPMorgan semiconductor analyst Harlan Sur characterized these SCAs as a "fundamental shift" in Micron's business model—from a cyclical commodity supplier to a long-term supplier with multi-year contract protection and significant downside hedging for both revenue and profit.

The value of these contracts lies in: First, the covered volume is substantial, with signed agreements corresponding to approximately 20% of DRAM volume and about one-third of NAND volume; second, price and volume are linked, with 14 agreements based on minimum committed volumes and minimum prices, corresponding to approximately $100 billion in cumulative minimum revenue; third, customers must provide a total of $22 billion in deposits and financial commitments. Fourth, the gross margin corresponding to the floor price of the agreement is "significantly higher than the historical peak" (the historical peak is about 62%), effectively locking in a higher profitability floor for Micron.

16 Contracts Covering 20% of DRAM and One-Third of NAND

Micron disclosed that it has signed 16 SCAs, with customers spanning three major markets: data centers, consumer electronics, and automotive.

Customer distribution includes 4 large customers (widely speculated by the market to include hyperscale cloud vendors and major consumer electronics OEMs), 3 medium-sized customers, and the remaining 9 are smaller customers in the automotive industry.

Contract Terms: Data center and consumer electronics contracts are for 5-year terms, covering 2026 to 2030; automotive contracts are for 3-year terms.

Coverage Scope: These 16 agreements collectively cover approximately 20% of Micron's DRAM shipments and about one-third of its NAND shipments.

According to a Barclays research report, management stated that when all planned SCAs are fully signed, it is expected that over 50% of the company's revenue will come from these agreements. Among these, agreements with fixed prices or price ranges are expected to account for approximately 40% of the company's revenue.

$22 Billion Deposits Increase Default Costs: Customers Pay First, Micron Holds Temporarily, Refunds Upon Expiry

Under the 16 signed agreements, Micron will receive a total of approximately $22 billion in cash deposits and other financial commitments—$18 billion in unrestricted cash and $4 billion in letters of credit.

These funds are held by Micron, remain on the balance sheet during the contract period, are returned to customers upon expiration, and the return schedule is "back-end weighted," meaning the bulk is returned in the latter half of the agreement.

This money cannot simply be viewed as prepaid revenue. Its true function is to increase the cost of customers changing their minds.

Regarding the binding nature of the contracts, a Morgan Stanley research report directly quoted management's statement during the conference call: "These contracts are non-cancellable." If customers fail to take delivery of the agreed volume and price, Micron can take action against the deposits. For Micron, this effectively adds a guarantee to part of its demand over the next few years; for customers, it is the cost of commitment paid for supply certainty.

This also explains why customers are willing to accept price ranges and deposit arrangements. Driven by demand for AI servers, data center SSDs, HBM, and high-end terminals, locking in volume has value when memory supply is tight.

Pricing Structure: Has a Ceiling, but the Gross Margin Locked by the Floor Price is "Far Above the Historical Peak"

The pricing framework for SCAs is divided into three categories: fixed prices, price ranges with upper and lower limits, or prices that reference the market price but fluctuate within a similar range.

The Price Ceiling Part: For existing products, the price ceiling references the market price from the second quarter of 2026. This clause was interpreted by some market participants as Micron "actively capping the upside for price increases," leading to some divergence in opinion.

But the floor price part is the real highlight: The gross margin corresponding to the floor price is "far higher than the peak profitability of any historical cycle." Micron's peak gross margin in the past was approximately 62%, while the current gross margin has reached 84.9%—meaning even if the floor price clause is triggered, Micron's profitability level still far exceeds the best periods in its history.

However, SCAs are not "prices go up forever" contracts. Some existing products have set price ceilings, with the ceiling anchored to the market price of the second quarter of 2026. In other words, Micron has traded a portion of future price upside for higher revenue certainty and a guaranteed gross margin floor.

Analyst Joseph Moore commented on this: "The contract price ceiling being flat with the Q2 price" does raise some concerns about the "company capping its upside," but he also pointed out that gross margins are approaching 90% and are expected to remain in this range for a considerable period—it is reasonable for counterparties to seek some protection in negotiations, and the duration of the contract is the core dimension for assessing its value.

$100 Billion Revenue Floor, And It's Just the "Minimum"

Of the 16 agreements, 14 have clearly defined price terms.

According to research reports from Barclays and JPMorgan, the total minimum committed revenue (RPO, i.e., remaining performance obligations calculated based on minimum committed volumes and prices) for these 14 agreements is approximately $100 billion.

Management explicitly stated that actual revenue is expected to be "significantly higher" than this floor. This is because the $100 billion is merely the guaranteed value based on the floor price; if market prices exceed the floor price, revenue will naturally increase.

For new products, the agreements also retain additional pricing upside.

Expansion Still Needed Behind Long-Term Contracts; Capital Expenditure Has Not Disappeared

Locking in demand does not equate to automatic delivery.

Micron has raised its FY26 net capital expenditure guidance to approximately $27 billion, up from the previous ~$25 billion. FY27 quarterly capital expenditure is expected to be higher than the FQ4 level, with over half of the year-over-year increase coming from construction-related CapEx to prepare cleanroom capacity in advance.

This indicates that SCAs do not lead to an asset-light model but rather provide a more certain rationale for expansion.

Customers are willing to put up money, and Micron must also invest. Long-term contracts make expansion more justifiable, but if future demand or prices deviate, capacity deployment could still become a cyclical variable.

Behind the Three Major Institutions' Consensus to Raise Target Prices, the Market is Re-evaluating "How Long Peak Profits Can Last"

All three institutions raised their target prices for Micron, but the core logic goes beyond the strong May quarter earnings beat.

Barclays (Analyst Tom O'Malley): Raised the target price from $1,175 to $2,000, based on 12x CY27 EPS of $166.74. The report stated that the SCA details are "better than expected," viewing these agreements as "materially positive for downside protection," and noted that the supply-demand imbalance will not fade in the near term, leaving upside potential.

Morgan Stanley (Analyst Joseph Moore): Raised the target price from $1,050 to $1,200, based on 30x through-cycle earnings power ($40 per share). The report increased its through-cycle earnings estimate from $35 to $40 per share, reasoning that the earnings run rate is trending toward $200 per share.

JPMorgan (Analyst Harlan Sur): Significantly raised the target price from $550 (Dec 2026 target) to $1,540 (Dec 2027 target), based on 10x (10-year median P/E) FY28 EPS of $154. The report characterized the SCA expansion as a "step-function change," believing it fundamentally alters the nature of Micron's business model.

Behind these model changes, the key variable is profit sustainability.

Micron's May quarter revenue reached $41.456 billion, up 73.7% sequentially; the midpoint of the August quarter revenue guidance is $50 billion, with a non-GAAP EPS midpoint of $31. The single-quarter figures are already very high, but the SCAs provide the market with another question: if prices stop rising rapidly, can Micron still maintain its high gross margins and high free cash flow?

The current framework provides an answer: a portion of revenue has stronger protection, but not all revenue. Price ceilings, future expansion, and the sustainability of AI demand remain boundary conditions.

Deposits and Cash Flow Open Up Capital Return Potential, But Timing is Constrained

SCAs also bring a balance sheet change: deposits will come into Micron's hands, and although they must ultimately be returned to customers, they will increase the cash balance in the short term.

As of the May quarter, Micron had approximately $26 billion in cash and investments; quarterly operating cash flow was $25.4 billion, and adjusted free cash flow was $18.3 billion. In the August quarter, it also expects to receive approximately $10 billion in customer cash deposits.

The path for capital returns is also becoming clearer. Restrictions related to the US CHIPS Act limit Micron's near-term buyback capacity. After December 9, 2026, as the restriction window passes, the company's guidance points towards gradually returning 100% of excess cash to shareholders, with buybacks being the primary method.

This part is not a direct revenue contribution from SCAs, but it is another aspect of how SCAs change the market narrative: if high profits are sustained and cash accumulates rapidly, Micron may no longer just be "making money from the cycle" but could enter a more stable cash return framework.

The Earnings Themselves: Record High Gross Margin, Next Quarter Guidance Beats Expectations Again

Beyond the SCAs, Micron's May quarter (FY3Q26) earnings data was also strong:

• Revenue $41.456 billion, up 73.7% sequentially, significantly exceeding market expectations of $35.6 billion
• DRAM revenue $31.3 billion (+67% QoQ), NAND revenue $9.9 billion (+99% QoQ)
• DRAM average selling price (ASP) increased slightly over 60% QoQ, NAND ASP increased in the mid-80% range QoQ
• Gross margin 84.9%, a record high, above market expectations of around 81.8%-81.9%
• Earnings per share $25.11-$25.12, significantly exceeding market expectations of about $20.49

August quarter (FY4Q26) guidance:

• Revenue guidance midpoint of $50 billion, higher than the market expectation of approximately $43.1-$43.6 billion
• Gross margin guidance of approximately 86%, continuing to exceed market expectations
• Earnings per share guidance midpoint of $31.00, higher than the market expectation of about $25.31-$25.72