Expanding DRAM supply shortages are driving robust price hikes in both contract and spot markets, with significant upside potential for the first quarter. Micron’s earnings substantially beat expectations, and with supply tightness projected to persist for years, the company is securing long-term agreements and aggressively increasing Capex for HBM and advanced nodes. Analysts foresee continued strong pricing momentum favoring sellers.

Key Highlights

• Robust Market Momentum: Severe supply shortages are driving significant price surges in the contract market for the first quarter, with upside potential for LPDDR5 and HBM. Spot markets remain on an upward trend despite minor year-end inventory adjustments.
• Strong Financial Performance: Micron’s revenue and gross margins significantly exceeded guidance, driven by soaring contract prices and server demand, though low inventory levels limited shipment volume.
• Outlook & Strategy: Management forecasts prolonged supply tightness extending for years, prompting binding long-term agreements with customers and a substantial increase in Capex to accelerate HBM and advanced node capacity.
• HBM & Analyst View: HBM market growth targets are accelerated. Analysts predict that persistent supply-demand imbalances will likely push contract price hikes beyond initial estimates, boosting supplier profitability.

Table of Contents

1. Market Update
2. TrendForce’s View
   • Micron's Consolidated Gross Margin (Encompassing DRAM and NAND Flash)

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