Sinochem Securities: Micron Technology Advances Long-Term Agreement Implementation, Supply-Demand Gap Expected to Persist

Odaily Planet Daily reported that a research report from Sinochem Securities suggests that Micron Technology is advancing the implementation of long-term agreements, and the supply-demand gap is expected to persist. Micron has completed 16 SCAs (Strategic Customer Agreements) with clients, covering downstream markets including data centers, consumer electronics, and the automotive sector. Among these SCAs, automotive customer contracts are set for three years, while other customers primarily have five-year terms. These 16 SCAs already account for 20% of Micron's DRAM shipments and one-third of its NAND shipments.

Even the lower end of the price range in Micron's SCAs can generate profitability exceeding that of past market cycle peaks. Micron expects DRAM and NAND supply to remain tight through 2027. Sinochem Securities believes that supply in the storage industry is likely to continue being tight, and Micron is poised to maintain high profitability. By advancing long-term agreement signings with downstream clients, Micron is expected to reduce the cyclical volatility of its product shipment prices and mitigate periodic fluctuations in its financial performance. (Jin Shi Ten)