Japan Essentials - 26 Jun 2026

Research evidence excerpt

Japan Essentials - 26 Jun 2026

Macquarie Equity Research

25 June 2026

Chain Reaction

Information Technology

Hong KongMicron 3QFY26 readthrough

Memory shortage to persist beyond 2027

Arthur Daniel

Key Points Lai Kim

Supply constraints reflect long fab lead times, rising HBM wafer demand,

and greater manufacturing complexity at advanced process nodes. Jeffrey Hiroshi

Ohlweiler Taguchi

Strategic Customer Agreement details: 16 contracts with US$22bn deposits

received. Positive in reducing cyclicality and improving earnings visibility.

"Chain Reaction" provides an expected read-

Positive read for all Asia AI supply-chain names. through to the Asia supply chain as it reacts to

results or unfolding events of global industry

leaders.

• May-Q result and Aug-Q guidance exceeded expectations. Micron's Figure 1 - Stocks mentioned

May-Q sales of US$41.5bn (up 74% QoQ) beat BBG cons by 16%.

Operating margin of 81% also hit record high and beat BBGe cons by 4pt.

The company guided Aug-Q sales to increase 21% QoQ with OPM of 83%,

above BBGe cons by 16% and 3pt, respectively.

• Memory super cycle still in early innings. Micron indicated that DRAM

and NAND industry demand continue to significantly exceed industry

supply. Even as Micron expects industry supply to improve gradually in Source: Bloomberg, Macquarie Research, Jun 2026

2028, the company did not have line of sight as to when memory supply Closing price as of June 24th.

will be able to catch up with increasing demand.

• Hottest topic was strong strategic customer agreements (SCAs).

Micron has signed 16 SCAs with customers across all segments and sizes.

The 16 SCAs represent 20% of DRAM volume and 1/3 of NAND volume

over the period. The management expects at least 50% of company

revenue will be under SCAs when completed.