Micron sees memory supply tighter through 2028, with 26 take-or-pay deals and $150B RPO
firstadopter · x · 2026-10-01
FUNDA's review of Micron's FY26Q4 results:
- Tighter supply ahead: Micron expects CY27/CY28 memory supply-demand to be tighter than 2026, with no clear timeline for balance even after planned cleanroom expansions; prices should keep rising through FY27 at a more moderate quarter-over-quarter pace.
- Long-term lock-ins: 26 take-or-pay agreements signed, RPO $150B with $32B in customer financial commitments (mostly cash deposits). Strategic Customer Agreements cover 35%+ of expected revenue through 2030 (target 50%), 75% with defined pricing frameworks reflecting current shortage levels — LTA pricing concerns look overstated.
- Guidance: FY27Q1 gross margin guide came in 75bps below buy-side expectations due to incentive comp and new fab startup costs; adjusted, it was 80bps above. Revenue and EPS beat. The author reiterates a longer plateau for this memory cycle, expects higher shareholder returns from Dec 9, 2026, and estimates CY2027 EPS of $213 (5x forward P/E).
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