Micron's earnings report offers Bank of America insight: The memory supercycle may last until 2027 or even 2030.

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Micron Technology’s latest financial report and performance guidance are reshaping the market's perception of the global memory chip industry cycle. In a recent research report, Bank of America Securities pointed out that this memory super cycle may extend to 2027, or even last until 2030, with structural changes underway in the industry landscape.

According to Chasing Wind Trading Desk, Bank of America Securities extracted five key takeaways from Micron’s financial report, covering the persistence of the super cycle, the widespread adoption of long-term agreements (LTA), high barriers to new wafer fabs, limited capacity expansion before 2028, and continued significant growth in free cash flow under the backdrop of increased capital expenditures. Micron also revealed that HBM4 sales have reached $1 billion, and is advancing new plant constructions and large-scale EUV equipment purchases across the US, Taiwan, Singapore, and Japan.

Major Asian memory chip manufacturers including Samsung and SK Hynix share Micron's optimistic outlook for the industry, and this consensus further strengthens market confidence in the persistence of the current cycle.

Persistence of the Super Cycle: Structural Supply-Demand Imbalance Supports Long-Term Boom

The persistence of this memory super cycle far exceeds previous cycles, with the core driver being structural constraints on the supply side.

The report highlights that new wafer fabs face high construction costs, local government regulations, and power and water supply hurdles, making large-scale replication difficult in the short term. Even looking ahead to 2028, effective wafer capacity expansion remains limited—upgrading older fabs takes up significant cleanroom resources, stretches manufacturing cycle times, equipment sizes keep increasing at both front and back ends, advanced process yields ramp up slowly, and the high conversion ratio of HBM compared to traditional DRAM all suppress overall available capacity.

Meanwhile, the demand side continues to benefit from accelerated AI infrastructure build-out, with robust demand for high-end products such as HBM4, HBM4e, SOCAMM, LPDDR5, GDDR7, and enterprise SSDs, driving bit shipment growth in the second half of 2026 and 2027 to above prior expectations, but still expected to remain below 20% year-over-year.

Long-Term Agreements Reshape Pricing Mechanism: Industry Cyclicality May Flatten

The accelerated adoption of LTAs is a key variable distinguishing this memory cycle from previous ones.

Micron and other large memory manufacturers are increasingly signing long-term supply agreements with major tech companies and OEM customers to lock in shipment prices. This model closely resembles the mature operating logic of Taiwan’s foundry industry, and has the potential to significantly reduce the cyclical volatility of the memory industry, maintaining high profitability over longer time horizons.

However, as LTA penetration rises, the room for significant average selling price (ASP) increases becomes compressed. The report forecasts that ASP trends in Q3 or H2 2026 will turn moderate, contrasting with the strong performance in Q2. Based on this, global DRAM and NAND sales forecasts for 2026–2028 were raised by 2%–4%, mainly due to Q2 2026 ASP exceeding expectations, partly offset by subsequent quarters' ASP reductions under LTAs, along with slight increases in shipment forecasts for H2 2026 and 2027–2028.

By comparison, Taiwan’s Nanya Technology’s DRAM business still mainly uses traditional monthly or quarterly price negotiations, with a very low LTA coverage rate, putting it at a relative competitive disadvantage during the industry's pricing mechanism transition.

Market Scale and Financial Outlook: $100 Billion Industry Accelerates Formation

Micron’s revenue guidance in the financial report aligns closely with Bank of America’s industry model, further solidifying expectations for memory industry scale expansion.

Micron expects revenue of about $50 billion for the quarter ending August 2025, translating to annualized operating income of roughly $200 billion. Based on Micron’s approximately 20% market share, the global memory chip market could reach around $1 trillion. The industry model shows that global DRAM and NAND sales in Q3 2026 will total about $257 billion, with annualized scale also pointing to the $1 trillion level, mutually corroborated with Micron’s guidance.

From high-frequency demand data, Korea’s semiconductor exports (mainly memory chips) grew 188% year-over-year in the first 20 days of June, maintaining strong momentum. DRAM spot prices have risen for five consecutive weeks, up about 20% cumulatively, while NAND spot prices dipped about 5%, showing divergent movements.

Although Micron's capital expenditures this cycle more than doubled compared to normal cycles, free cash flow still saw significant growth, confirming the profitability improvement brought by high-end product upgrades, and providing financial support for the sustainability of the industry’s long-term boom.

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