Bank of America has maintained its buy rating on Micron Technology (NASDAQ:MU) following meetings with company executives, citing developments in memory supply agreements, manufacturing technology and the company’s product roadmap through 2027 and 2028.
The bank’s analysts met with Micron management in New York and Boston last week, following the semiconductor manufacturer’s recent technology and product webinar.
Participants included Chief Operating Officer Manish Bhatia, Chief Technology Officer Scott DeBoer, Chief Financial Officer Mark Murphy and Corporate Vice President of Investor Relations Satya Kumar.
The discussions covered long-term customer agreements, memory manufacturing capacity, high-bandwidth memory development and Micron’s plans for shareholder returns.
Micron Extends Memory Supply Agreements Beyond 2030
According to Bank of America, Micron has been discussing supply and capacity agreements extending approximately five years beyond 2030, with negotiations for 2031 already underway.
These arrangements include commitments covering memory bit volumes and associated financial obligations, providing a framework for future supply and purchasing activity.
Micron expects approximately 35% of its total sales to be covered by such agreements, with a longer-term objective of increasing that proportion to 50% by 2030.
The agreements are intended to provide greater visibility into future customer demand and production requirements.
They also reflect the importance of securing memory supplies as manufacturers and data centre operators plan future computing infrastructure investments.
Bank of America identified the duration and structure of these arrangements as factors supporting its assessment of Micron’s business outlook.
Memory Supply Constraints Influence Product Specifications
During the meetings, Micron management discussed the relationship between memory availability and the design of computing systems.
Executives indicated that current memory specifications are being shaped primarily by constraints on memory supply rather than limitations involving computing capacity, land availability, electricity or data centre building infrastructure.
The company said graphics processing unit manufacturers and hyperscale data centre operators are adapting their plans to available logic semiconductor capacity and chip-on-wafer-on-substrate manufacturing resources.
These considerations affect the configuration and production of advanced computing systems, particularly those used for artificial intelligence applications.
Memory supply remains an important component of infrastructure planning because advanced processors require sufficient memory capacity and bandwidth to operate as intended.
The discussions highlighted the interaction between memory manufacturing availability and broader semiconductor production capabilities.
Micron Outlines High-Bandwidth Memory Development Plans
Micron provided an update on its high-bandwidth memory (HBM) technology roadmap, including its ability to support different memory stacking configurations.
The company said its technology can accommodate HBM products ranging from four-high to 16-high stacks.
It also outlined the potential for customised HBM configurations designed for particular customer requirements and computing applications.
HBM technology is used in advanced computing systems where processors require high data transfer rates between memory and processing components.
Different stacking configurations allow manufacturers to address varying requirements for memory capacity, performance and system design.
Micron’s roadmap covers both standard configurations and customised products, reflecting the range of applications being developed by its customers.
DRAM Roadmap Includes 1-Delta Production in 2027
Micron also discussed its plans for dynamic random-access memory (DRAM) manufacturing technology.
The company expects to introduce four additional planar manufacturing nodes following its existing 1-gamma process.
Volume production using its 1-delta technology is targeted for the second half of 2027.
Successive manufacturing nodes are intended to support improvements in memory density, performance and production efficiency.
The roadmap provides an indication of Micron’s planned technology development over the coming years, although commercial implementation will depend on manufacturing progress and production schedules.
Bank of America’s assessment also considered the company’s ability to continue developing its DRAM processes as demand for memory products evolves.
NAND Flash Roadmap Targets More Than 400 Layers
In NAND flash memory, Micron outlined development plans for its G11 generation.
The company is targeting a design with more than 400 layers and twice the bit capacity of its G9 generation by the end of 2027.
NAND flash technology is used for data storage across consumer electronics, enterprise systems and data centre infrastructure.
Increasing the number of memory layers allows manufacturers to expand storage density within semiconductor devices.
Micron’s planned G11 development is intended to increase the amount of data that can be stored using its NAND technology.
The company has not provided additional production or financial targets for G11 in the information discussed by Bank of America.
Micron Plans to Increase Share Repurchases
Micron management also addressed the company’s capital allocation plans during the investor meetings.
According to Bank of America, Micron intends to increase share repurchases using free cash flow beginning on 9 December.
The company currently has approximately $35 billion in authorised share repurchases.
Bank of America estimates annual free cash flow of between $150 billion and $200 billion for 2027 and 2028.
These figures represent the bank’s projections rather than reported financial results or company guidance.
The planned increase in buybacks would direct a portion of future cash generation towards shareholder returns, subject to the company’s financial performance and capital allocation decisions.
The timing and scale of actual repurchases will depend on available cash flow and management’s implementation of the programme.
Bank of America Retains Positive Investment Assessment
Bank of America’s decision to maintain its buy rating follows discussions covering Micron’s supply agreements, manufacturing plans and potential cash generation.
The bank cited improved visibility into memory supply arrangements extending into the next decade, alongside Micron’s development plans for HBM, DRAM and NAND flash technologies.
The company’s roadmap includes 1-delta DRAM volume production in the second half of 2027 and G11 NAND development targeting more than 400 layers by the end of that year.
Micron also plans to increase share repurchases, while Bank of America’s free cash flow estimates indicate the bank’s expectations for future financial performance.
The investment rating reflects Bank of America’s assessment and does not guarantee that Micron will achieve its technology, financial or shareholder return objectives.