Micron Technology Inc (MU.O): It’s Different This Time; Raising TP to $1400

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Micron Technology Inc (MU.O): It’s Different This Time; Raising TP to $1400

Micron Technology Inc (MU.O)

25 June 2026 Citi Research

MU F4Q26 Earnings Review

Revenue mix. DRAM/HBM tends to be 75%-80% versus NAND 20%-25%. Micron

is comfortable at that mix and can serve customers in these categories. In HBM,

Micron’s goal is to have HBM share consistent with their DRAM share. AEBU and

MCBU are 40% of MU sales. Micron believes in its strength of diversity including

non-HBM DRAM, HBM, and NAND.

DRAM/NAND bit industry CAGR. Micron provided updated 2026-bit demand

forecast. DRAM forecast is up a little bit and NAND is relatively similar. Micron is

not providing more forward-looking views on these CAGRs because bit shipments

aren't determined by demand anymore, they are determined by supply. Micron is

constantly evaluating supply and continues to believe supply is short. They can't

see when supply will meet demand.

SCAs. These customer agreements or SCAs cannot be canceled. Customers cannot

walk away. They are designed to be take-or-pay and are generally 5-year

commitments. They are annual volume commitments for each year. Take-or-pay

means customers are obligated to pay for price times volumes whether they want

to purchase the bits or not. There is a price band with a price ceiling or price floor.

Price gets negotiated every quarter depending on market conditions. There are also

premiums in the agreements for advanced technology products like LP6, DDR6, or

a new HBM. Some SCAs include HBM.

Cash deposits. There are also upfront cash deposits that these agreements entail.

These are cash deposits or a letter of credit. Of the 16 agreements, these aggregate

to $22 billion in cash and financial commitments. Cash alone is $18 billion. The