On October 1st, according to a report from IT, Sanjay Mehrotra, the Chairman of Micron Technology and CEO, stated during a financial report conference call that Micron has currently signed 26 long-term agreements, securing approximately $150 billion (Note from IT: At current exchange rates, this is about 1.01 trillion yuan) in long-term orders. The supply and demand in the storage market are expected to be even more tight in 2027 and 2028 than in 2026, and there "is no sign of a balance between supply and demand being restored."
Micron Technology announced quarterly revenue guidance on Wednesday that exceeded market expectations, and so far this year, the company's stock price has more than tripled. Driven by the optimistic sentiment regarding the growth prospects of AI, Micron's market value officially entered the trillion-dollar club in May. The company's stock price rose slightly by less than 1% in after-hours trading on Wednesday.
The craze for generative artificial intelligence has made high-bandwidth memory an indispensable component in data centers, which has benefited manufacturers such as Micron. Micron is a key supplier to NVIDIA, and NVIDIA's processors currently dominate various AI computing tasks.
In a pre-prepared statement, Meherotra stated that customers have significantly increased their financial commitments under the long-term supply agreements, with the total amount rising from $22 billion (approximately 147.771 billion yuan at current exchange rates) announced in June to $32 billion (approximately 214.94 billion yuan at current exchange rates). The majority of these commitments have been made in the form of cash deposits. The CEO also noted that compared to the fiscal year 2026, the supply and demand situation for memory and flash memory will be much more tight during the fiscal years 2027 and 2028.
Compared to other fields we often discuss – whether it's logic chips or the power supply facilities in data centers – memory is undoubtedly the main constraint and bottleneck in the development of artificial intelligence, said Manish Bhatia ( Manish Bhatia ), President and Chief Operating Officer of Micron, in an interview. "Data centers have grown into the largest market for memory and storage products."
Micron has currently received orders that far exceed its own production capacity. As a result, the company increased its investment plans in the United States in July, aiming to invest over $250 billion (approximately 1.68 trillion yuan at current exchange rates) by 2035. Meanwhile, Amazon, Alphabet, and other tech giants plan to spend a total of over $730 billion (about 4.9 trillion yuan at current exchange rates) on infrastructure this year in AI.
Bartia stated that the speed at which new production capacity is brought online is ultimately limited, partly because the benefits brought by subsequent technological iterations are gradually diminishing. Micron is advancing the expansion of production capacity at almost all of its manufacturing bases around the world, including new factories in Japan and the United States. The new factories are expected to produce their first batches of silicon wafers by mid-2027; however, Bartia also acknowledged that it will take several more quarters for the factories to reach full production capacity before they can have a substantial impact on the market.
Chief Financial Officer Mark Murphy ( Mark Murphy ) stated that the remaining performance obligations corresponding to the aforementioned long-term agreement (a key indicator for measuring future contract revenue) have risen to approximately $150 billion (about 1.01 trillion yuan at current exchange rates), compared to about $100 billion (about 671.688 billion yuan at current exchange rates) in the previous quarter.
"We expect to set another new performance record in the fiscal year 2027, with revenue growing quarter-on-quarter," Murphy said.
According to data compiled by the London Stock Exchange Group ( LSEG ), the company expects its revenue for the next fiscal quarter to reach $61.5 billion (approximately 413.088 billion yuan at current exchange rates), with a fluctuation of $1.5 billion (about 10.075 billion yuan at current exchange rates); whereas analysts' average forecast is $57.02 billion (approximately 382.996 billion yuan at current exchange rates).
The adjusted earnings per share for the first fiscal quarter are expected to be $38.15 (approximately 256.2 RMB at the current exchange rate), with a fluctuation range of plus or minus $1 (approximately 6.7 RMB at the current exchange rate), which is higher than the market expectation of $35.40 (approximately 237.8 RMB at the current exchange rate).
Meherotra also stated that Micron has already finalized supply agreements for most of its high-bandwidth memory production capacity for the fiscal year 2027; moreover, it will increase its capital expenditures for the fiscal year 2027 beyond the original plan in order to expand production capacity.
This company, headquartered in Boise, Idaho, competes with Samsung Electronics from South Korea and SK Hynix; the latter two companies currently hold a major share of the global high-bandwidth memory market.
Bob O'Donnell, the chief analyst of a technical analysis research firm ( Bob O ’ Donnell ), pointed out: "Micron's financial report and performance outlook, which far exceeded expectations, should be able to completely dispel some people's doubts about whether the construction of the AI industry can continue."
The company's revenue in the fourth fiscal quarter more than tripled, reaching $542.3 billion (about 3.64 trillion yuan at current exchange rates), exceeding analysts' forecast of $510.7 billion (about 3.43 trillion yuan at current exchange rates); adjusted earnings per share were $33.42 (about 224.5 yuan at current exchange rates), also surpassing the market expectation of $31.61 (about 212.3 yuan at current exchange rates).
