[Edaily SOYEON KIM Reporter Kim Yoon-ji] As Micron announced a record-breaking “earnings surprise,” expectations for the earnings of SamsungElectronics and SK hynix are rising even further. Industry analysts project that the combined operating profit of the two companies for the second quarter of this year will reach 150 trillion won.

In particular, the status of the Strategic Customer Agreements (SCAs) disclosed by Micron is seen as a signal that the memory industry is poised for structural improvement. As new contract structures take hold—enabling long-term high profitability and earnings visibility—the existing order of the memory market is shifting.

◇ Structural Improvement in the Memory Industry… A Boom That Changed the Market Rules

According to industry sources on the 25th, U.S. memory company Micron announced record-breaking results for the third quarter of its fiscal year on the 24th (local time) and disclosed the status of its SCAs. CEO Sanjay Mehrotra stated during a conference call, “We have signed 16 SCAs to date, and this will fundamentally transform the company’s business model,” adding, “Once the contracts currently under negotiation are finalized, more than half of the company’s total revenue will be generated under the SCA framework.”

Of the 16 contracts, seven were classified as major contracts, and the key customers are reportedly data center operators. Unlike traditional annual Long-Term Agreements (LTAs), SCAs lock in volume and pricing in advance for a period of five years (three years for the automotive sector).

In particular, the structure is characterized by establishing a price band through a ceiling set at market price levels and a floor maintained throughout the contract period. Micron explained that even the floor price alone guarantees a gross profit margin (GPM) higher than the quarterly peak levels seen in any past business cycle. Furthermore, by applying a “take-or-pay” clause—which requires customers to bear costs even if they do not use the allocated volume—these contracts are far more binding than existing agreements.

This fundamentally changes the contract structure of the memory industry. Chae Min-sook, an analyst at Korea Investment & Securities, noted, “This clearly demonstrates that the memory business model is shifting away from its past cyclical structure toward a new model capable of securing high margins and earnings visibility over the long term.”

Until now, the memory industry has been classified as a typical cyclical industry characterized by recurring supply gluts and price crashes. However, the surge in demand for artificial intelligence (AI) memory has significantly strengthened memory suppliers’ bargaining power, creating an environment where they can secure both high profitability and stability. Industry observers believe that if this supplier-dominated market continues, such contract structures will spread throughout the entire memory industry.

◇ Micron Posts Record-Breaking Earnings… Expectations for Samsung and SK Soar

In its latest earnings announcement, Micron revealed plans to negotiate separate price premiums for next-generation products, including low-power DRAM (LPDDR6), DDR6, and next-generation High Bandwidth Memory (HBM). Consequently, profitability is expected to improve further in the future.

In fact, Micron recorded a phenomenal operating profit margin of 81.2% this quarter—a figure that surged by more than 10 percentage points compared to the previous quarter (69%).

Micron’s strong performance and changes in its memory contract structure are expected to have a positive impact on the domestic memory industry as well. As Micron—often referred to as the “barometer of the memory market”—posts record-breaking earnings, expectations are growing that SamsungElectronics and SK hynix will also achieve their best-ever results.

According to financial information provider FnGuide Inc., the consensus estimate for SamsungElectronics’ operating profit in the second quarter of this year is 86.8414 trillion won, while SK hynix’s is 63.0998 trillion won. Combined, the operating profit forecasts for the two companies total approximately 150 trillion won.

The full-year operating profit forecasts for SamsungElectronics and SK hynix this year are 363 trillion won and 264 trillion won, respectively. This means the combined operating profit of the two companies could reach 627 trillion won—an unprecedented level in the history of South Korean companies.

The industry expects the structural memory supply shortage to continue beyond next year. Micron is expanding its production capacity (CAPA) in Taiwan and Singapore and is constructing new fabs in Idaho and New York State in the U.S. SamsungElectronics and SK hynix are also expanding their investments in production facilities, primarily in Pyeongtaek and Yongin, to meet the growing demand for AI memory.