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Micron Technology's blowout quarterly results have swept aside concerns about the memory chip market, with analysts saying the figures confirm that a "memory supercycle" is now playing out in earnings. The strong showing sent South Korean chipmakers surging in tandem.

Micron said Wednesday that fiscal third-quarter sales rose 345 percent year-on-year to $41.46 billion, well above the market consensus of $35.69 billion.

Adjusted earnings per share came in at $25.11, a 1,252 percent jump from a year earlier and more than 22 percent above the consensus estimate of $20.49. Sales, gross margin, operating profit and EPS all hit all-time highs.

The results underscored sustained demand for AI memory chips and continued margin improvement. DRAM sales surged 67 percent quarter-on-quarter to $31.3 billion, accounting for 76 percent of total revenue and setting a record. Shipment volumes rose only in the single digits, but average selling prices climbed in the low-60-percent range, driving the earnings beat. NAND sales also hit an all-time high, jumping 99 percent quarter-on-quarter to $9.9 billion.

The company's guidance easily topped market expectations as well. Micron projected fourth-quarter sales of $50 billion and EPS of $31.

Because the market had already anticipated a strong earnings surprise, the real test was whether Micron could clear the elevated bar. It did — and then disclosed details of its long-term supply commitment agreements, sending the stock up 14 percent in after-hours trading.

The supply commitment agreements drew the most attention. Micron said it has signed 16 such deals to structurally shift its business model, with remaining purchase obligations on 14 of those contracts totaling around $100 billion. The company also projected that, if all agreements are fulfilled as planned, roughly 40 percent of total revenue will eventually come from these deals.

The agreements are structured on a "take-or-pay" basis, obligating customers to purchase contracted volumes. About 40 percent of the contracts include both price floors and ceilings, designed to protect profitability even if market conditions deteriorate. Micron said that even at minimum prices, gross margins would exceed the peak quarterly level of any previous memory cycle.

Seo Sang-young, an analyst at Mirae Asset Securities, said the results "suggest the memory industry is shifting from a business driven by extreme price cycles to a stable, contract-based structure," adding that "earnings volatility will shrink significantly compared with the past, given the expansion of supply commitment agreements and a supply strategy focused on profitability."

Micron also expressed strong confidence in the broader memory market outlook, forecasting that demand for DRAM and NAND will structurally and significantly outpace supply, keeping conditions tight through 2027 and beyond.

"It will take considerable time before the shortage of memory and storage improves," CEO Sanjay Mehrotra said on a conference call. "We expect industry supply to gradually improve in 2028, but it is difficult to say for the time being when supply will be able to catch up with growing demand."

Analysts expect Micron's results to reignite a semiconductor rally. Moon Jun-ho of Samsung Securities said semiconductor share prices had shown high volatility recently and fear had spread rapidly, but that Micron had restored confidence through the earnings surprise. He added that "the key was the supply commitment agreements — a structure far more binding than a typical long-term supply contract."

Ko Young-min of Daol Investment & Securities said a rally forming new highs from late June through late July was likely, mirroring the earnings season from late March through late April. He added that an overweight strategy across Samsung Electronics, SK Hynix and the broader materials, components and equipment sector remains valid.

Micron's strong results also lifted domestic chipmakers. As of 10 a.m. Thursday, Samsung Electronics was up more than 4 percent and SK Hynix was up more than 8 percent.

Brokerages moved quickly to raise their price targets. KB Securities lifted its target for Samsung Electronics from 530,000 won ($345) to 550,000 won, while Mirae Asset Securities raised its target for SK Hynix from 3.8 million won to 4.2 million won.

The highest targets came from Nomura Securities, which set its Samsung Electronics target at 670,000 won and its SK Hynix target at 5 million won, reflecting confidence in a prolonged upturn in the memory market.

As optimism about the semiconductor sector grows, Kospi forecasts from domestic and foreign brokerages are being revised upward in quick succession.

Global investment bank JPMorgan raised its Kospi target to as high as 12,500 points Thursday. Mixo Das, JPMorgan's equity strategist, said "the fundamentals of the Korean market are tied to the AI cycle," adding that JPMorgan analysts are positive on a higher-for-longer memory cycle.


moon@heraldcorp.com