UBS: Micron Technology’s long-term customer contracts demonstrate sustainability

Glonghui, June 25 — According to a research report by UBS analysts, long-term contracts signed by Micron Technology with its clients are solid enough to withstand any market downturns over the next few years. UBS analysts noted that investors may worry these contracts could be shaken if the market slows, but the minimum price set in the contracts is low enough that it would take until 2029 at the earliest—and more likely 2030—before enough supply would come online to break the price floor and make clients consider defaulting. The analysts added that Micron Technology has also received prepayments from customers, which could eventually approach $40 billion to $50 billion, serving as a reliable form of “penalty” if conditions worsen.