新长期协议对盈利及市盈率可持续性的影响：将美光科技目标价上调至3000美元

Memory: What do New Memory LTAs mean for sustainability ofearnings and multiples? Raising SNDK TP to $3000 are different. This note analyzes what we know from SNDK, MU and others, why things aredifferent, and what this means for sustainability of earnings and PE multiples. +1 212 845 7822mark.newman@bernsteinsg.com Memory and Semiconductor investors are dubious on long-term agreements(LTAs) for good reason. The way old LTAs were written, particularly in memory, was +1 917 344 8339april.li@bernsteinsg.com +1 917 344 8481phoebe.sun@bernsteinsg.com same as previous take or pay arrangements.One major misconception of these new the data provided by companies we estimate SNDK’s floor price in recently signed LTAs is While these LTA’s do not completely remove risk of future downcycles, they dosignificantly alleviate downside risk.We analyze scenarios of mild downturn to a price declineto $0.11 (or 60% below “floor prices”).This compares to $81 EPS without LTAs. case, and $350 and $400 in our bull case.These higher numbers reflect the rising priceenvironment to continue stronger for longer, plus more sustainability and thus less steepblended average prices in a downturn (currently assumed starting in CY28). The Next Leg of the New Memory Paradigm: Lower volatility and highersustainability of earnings is worth a higher PE.Less downside to earnings due to LTAs is not being factored in to current multiples. We increase SNDK TP to $3000 on 11x FY28 BERNSTEIN TICKER TABLE Source: Bloomberg, Bernstein estimates and analysis. INVESTMENT IMPLICATIONS We value Sandisk at $3000, which is 11x FY28 EPS of $272 or 14x through cycle (FY26-30) average EPS of $213; this alsoequals 7.5x our bull case FY28 EPS of $400. Previously we valued SNDK at 8.5x our FY27 EPS and11x our 4-year throughcycle (FY26-29) EPS. Table Of Contents The Misconception of upfront Financial Commitments vs. Take-or-Pay contracts...................................................................................5Part II: Our Sandisk LTA analysis shows meaningful downcycle protection........................................................................................................6The three key variables...................................................................................................................................................................................................6Historical context: How bad could the next downturn be?............................................................................................................................... 7The implied Weighted-Average ASP for SNDK..................................................................................................................................................... 8Implied Gross Margin................................................................................................................................................................................................... 10Implied EPS......................................................................................................................................................................................................................11Part III: Why SNDK deserves a higher multiple.......................................................................................................................................................... 12Part IV: Model Update and TP raise to $3000........................................................................................................................................................... 12DETAILS PART I: WHAT ARE THESE NEW MEMORY LONG-TERM AGREEMENTS? Memory and Semiconductor investors are dubious on long-term agreements (LTAs) for good reason. The way old LTAswere written, particularly in memory, was extremely lopsided in favor of the customer - essentially committing supply to the of memory industry cyclical downturn.Stating the obvious: memory has historically been viewed as a highly cyclical Based on our recent conversation with a former WDC EVP who previously ran SanDisk, as well as from what we learnt fromSandisk and Micron earnings, we believe the memory makers are shifting away fromhistorically one-sided buyer-friendly Sandisk 10Q inExhibit 1: andExhibit 2. The strategy of Micron and Sandisk is essentially identical: lock in multiyear memorysupply with upfront financial commitment with price fixed to a certain extent, to dampen cyclicality and lift visibility, yet also withseveral differences between the two: •Reducing price variability:Both Sandisk and Micron have differing terms to reduce price volatility.Micronhas differenttypes ofSCAs(Strategic Customer Agreements) but we understand the majority of volume use an explicit, bounded priceband. The largest agreements set a ceiling price at the current calendar Q2 market price and a lower floor price that holds below CQ2 prices (we estimate approximately 50% lower) bu