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Wiki/Primary documents

Micron Q1 FY26 — prepared remarks and 10-Q

Date: Earnings call December 17, 2025; 10-Q filed December 18, 2025; period ending November 27, 2025.

Why it matters: The single most-cited primary document in this wiki. Mehrotra's Q1 FY26 prepared remarks contain the 3:1 HBM-to-DDR5 wafer trade ratio, the "50–66% of demand" admission, the "calendar 2026 fully booked on price and volume" statement, and the "specific commitments and stronger contractual structures" language. The matched 10-Q shows the customer-prepayment balance and the consideration-payable line.

Primary sources:

Load-bearing quotes

The 3:1 trade ratio

Mehrotra, verbatim from the call:

"The dramatic increase in HBM demand is further challenging the supply environment due to the three-to-one trade ratio with DDR5."

Why this is load-bearing: Single most important sentence in the cycle. It explains why commodity DRAM is short without any fab having burned down. Every HBM gigabyte shipped consumes three commodity-DRAM gigabytes of wafer-equivalent capacity. See supply/hbm-packaging-bottleneck.md for the decomposition.

Calendar 2026 fully contracted

Verbatim:

"We have completed agreements on price and volume for our entire calendar 2026 HBM supply."

Why: Price is locked, not just volume. Removes Micron's downside to a spot crash. Transfers inventory risk to the six contracted buyers. This is the contractual basis for everything in structure/ltas-and-prepayments.md.

"Specific commitments and stronger contract structure"

Verbatim:

"These contracts...have specific commitments in them and a much stronger contract structure."

Why: This is as close as Mehrotra gets to admitting take-or-pay. He does not use the phrase. The underlying ASC 606 disclosures and the balance-sheet "consideration payable" line tell the rest of the story.

Meeting only 50–66% of demand

Verbatim:

"In the medium term, we are only able to meet about 50% to two-thirds of our demand from several key customers."

Why: Quantifies the gap. Also: customers are overbooking. If AI capex slows even moderately, "true" demand contracts faster than allocations imply.

HBM TAM forecast

Verbatim:

"We forecast an HBM TAM CAGR of approximately 40% through calendar 2028, from approximately $35 billion in 2025 to around $100 billion in 2028."

Why: Vendor's own TAM projection. Anchors the structural-demand argument.

Memory as strategic asset

Verbatim (Q1 FY26):

"Memory is now essential to AI cognitive functions, fundamentally altering its role from a system component to a strategic asset."

And (Q4 FY25):

"Data center mix expansion looks structural, not cyclical."

Why: The framing that justifies the disciplined capex response. See supply/capex-discipline.md.

Six HBM customers

Customer base "now includes six customers" (Mehrotra Q1 FY26). The plausible six: Nvidia, AMD, Google, Microsoft, Amazon, Meta. Concentration is narrow — the cycle's durability tracks the AI capex of fewer than 10 entities.

What the 10-Q shows

From the balance sheet and footnotes:

Customer prepayments

  • $146M outstanding as of May 29, 2025 (per Q3 FY25 10-Q): "customer prepayments made to secure product supply in future periods and other contract liabilities."
  • $777M of revenue recognized against prior prepayment balance over the prior nine months.

Why: Material funding source — Micron is partially being financed by its customers. This is the cash skin-in-the-game on the buyer side.

Consideration payable to customers

  • $1.64B as of Nov 27, 2025 (up from $1.19B at Aug 28, 2025).

Why: Pricing-adjustment and return reserves owed back to customers. Rose ~$450M in a single quarter — the symmetric risk Micron retains on agreed prices.

Capex guidance

  • FY25 actual: $13.8B
  • FY26 guidance: $20B (raised from $18B in December 2025), "primarily supporting HBM supply capability and 1-gamma supply."

Why: Largest capex year in Micron's history — but allocated to HBM assembly and 1γ migration, not to new commodity DRAM wafer capacity. Discipline holds even at the top.

What the document does not contain

  • Take-or-pay language. ASC 606 disclosures do not enumerate cancellation terms in a form a reader can model. The "unprecedented" framing is the closest Mehrotra gets.
  • Named customers. Micron does not name its six HBM customers in the call or 10-Q.
  • Per-customer concentration. Unlike SK Hynix's DART disclosure (27% from a single customer), Micron does not publish a comparable concentration figure for HBM.

These omissions are what the wiki has to triangulate through Korean DART filings (see documents/sk-hynix-q3-2025.md) and Nvidia/AMD purchase-obligation disclosures.

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