Here is the Citi note on DRAM/NAND pricing. Price

Here is the Citi note on DRAM/NAND pricing.

Price Target & Valuation Adjustments

> Micron Technology (MU) Target Price: Trimmed to $1,150 (down from $1,400) based on an 8x P/E multiple (previously 10x) and a revised C27 EPS to reflect lower market multiples from mixed memory peer results.

> Rating: Maintained at Buy.

DRAM & NAND Pricing Outlook

> Deceleration: Both DRAM and NAND price increases are expected to decelerate quarter-over-quarter over the next four quarters, with prices projected to peak in 2Q of next year.

> Revised Pricing Assumptions:

DRAM Q/Q price adjustments shifted to 23%/9%/2%/0%, with 2H27 down 3% H/H.

NAND price assumptions moved to 29%/7%/0%/-1%, with 2H27 down 5% H/H.

FY27/28 EPS estimates lowered by 1%/2%.

Margins & Contracts

> Gross Margins: Expected to decline from current mid-80s levels and stabilize in the mid-70s next year as prices cool from a high base.

> Long-Term Agreements (LTAs): Micron has approximately 40% of DRAM bits locked under LTA pricing contracts.

Key Risks & Competition

> China Capacity Additions: Competition from Chinese manufacturers poses the biggest risk to the thesis:

YMTC: Plans to add 50k–60k wafer starts to its existing 200k operating capacity next year, boasts decent NAND tech, and aims to be the largest NAND player by 2030.

CXMT: Plans to add 50k to 350k DRAM capacity next year, currently has low yields, and targets ~600k by 2030.

While US restrictions limit direct sales into the US, European and other regional data center sales could indirectly impact Micron.

Mixed Memory Peer Performance

> Samsung: Reported memory sales and operating profit ahead of consensus driven by strong ASP growth in 2Q (mid-40% QoQ for DRAM, high-60% QoQ for NAND). Samsung is allocating 60–70% of planned capacity to LTAs, having signed 5 with major data center customers and finalizing 5 more.

> SK Hynix: Sales and operating profit came in just below consensus due to higher HBM exposure and slight product push-outs. DRAM ASPs rose 30% QoQ and NAND ASPs rose mid-50% QoQ. Signed 10 LTAs (typically lasting 5 years), including a $500B contract with Nvidia.

> Sandisk: Missed September-quarter revenue guidance due to more muted pricing, but secured 8 NBMs (diverse data centers and OEMs; weighted average duration of 4 years) covering 50%–66% of their bits in FY27/28 respectively.

$Micron Tech(MU.US) $DRAM $EWY $Sandisk(SNDK.US) $SK Hynix(SKHY.US)