Basewin Storage Inks $1.5 Billion Procurement Deal, Locks in Wafer Supply from Mysterious "Storage Original Equipment Manufacturer" for Next Two Years

After experiencing the sharp “V-shaped” reversal in storage chip prices in 2025, the STAR Market storage manufacturer Baiwei Storage (SH688525, stock price 231.5 yuan, market value 108.1 billion yuan) has chosen to lock in a $1.5 billion long-term purchase order to hedge against core raw material costs for the next two years.

On the evening of March 24, the company disclosed that it had signed a 24-month procurement contract with a certain “storage original manufacturer,” whose identity has been exempted from disclosure due to commercial secrets.

The global NAND Flash market is mainly monopolized by IDM companies such as Samsung, SK Hynix, Kioxia, Micron, and Western Digital. Baiwei Storage, as an independent storage solution provider, has established long-term stable partnerships with major wafer manufacturers.

$1.5 Billion Lock-in Long-term Contract, Supplier Identity a Mystery

According to Baiwei Storage’s announcement on the evening of March 24, the company has signed a routine operational procurement contract with a storage original manufacturer, agreeing to purchase a certain type of storage wafer at the specified quantity, price, and schedule. The total committed purchase amount is $1.5 billion, spanning 24 months from Q2 2026 to Q1 2028, with uniform procurement and locked-in prices.

Notably, due to commercial secrets, Baiwei Storage has exempted the disclosure of the contracting party’s name and related information. The announcement states that the company has followed internal procedures for information disclosure exemption and has exempted certain details of the contract.

In the semiconductor storage industry chain, “storage original manufacturer” specifically refers to IDM (vertically integrated manufacturing) companies that control core processes and capacity for storage wafers such as NAND Flash and DRAM. Unlike typical chip design firms, these manufacturers integrate chip design, wafer fabrication, packaging, and testing, serving as the source and core of the global storage industry chain. The NAND Flash market is mainly dominated by a few giants like Samsung, SK Hynix, Kioxia, and Micron, while the DRAM market is highly concentrated among Samsung, SK Hynix, and Micron. These players hold the most influence in the industry chain, and downstream independent storage solution providers like Baiwei Storage need to purchase core raw materials from them.

Baiwei Storage’s 2025 annual report disclosed that its upstream suppliers are highly concentrated among a few global storage wafer giants. The report shows that the top five suppliers account for 66.41% of the year’s total procurement, with Supplier One and Supplier Two contributing 3.838 billion yuan and 1.333 billion yuan respectively, representing 29.41% and 10.21%.

The NAND Flash market is mainly monopolized by Samsung, SK Hynix, Kioxia, Micron, and Western Digital. Baiwei Storage explicitly states in its annual report, “The company has established long-term stable relationships with major storage wafer manufacturers and distributors, and has signed long-term agreements with leading NAND and DRAM wafer manufacturers to ensure continuous and stable supply.”

Pre-emptive Capacity Lock to Address Industry Cycles

Regarding this contract, Baiwei Storage explained in the announcement that it will help enhance the stability of the company’s medium- and long-term storage wafer supply and reduce the impact of price fluctuations on costs. According to the contract, the company’s procurement volume for this product within 12 months accounts for 11.1% of its total NAND Flash procurement and 18.01% of its total sales in 2025, representing a relatively small proportion with overall manageable risk.

The storage wafer market has long experienced cyclical fluctuations, with prices heavily influenced by supply and demand. Data from the annual report shows that in 2025, the storage industry experienced a “bottoming out and rebounding” reversal: in Q1, NAND Flash and DRAM contract prices fell by 15%-20% and 8%-13% respectively quarter-over-quarter; in the second half, with accelerated AI application penetration, prices rose by 33%-38% and 45%-50% in Q4.

Such significant price fluctuations pose challenges to downstream storage manufacturers’ cost control and profitability. By signing a lock-in long-term purchase order, Baiwei Storage can hedge against raw material price volatility over the next two years, providing stable cost expectations for business development.

The annual report shows that in 2025, the company achieved operating revenue of 11.302 billion yuan, a year-on-year increase of 68.82%; net profit attributable to the parent was 853 million yuan, up 429.07%. Despite the substantial growth, the company’s net cash flow from operating activities was -1.965 billion yuan, mainly due to increased operational procurement expenditures. As of the end of 2025, the company’s inventory reached 7.868 billion yuan, a year-on-year increase of 122.44%.

Baiwei Storage emphasizes in its annual report that it will continue to deepen cooperation with major global storage wafer manufacturers and sign long-term supply agreements to lock in storage wafer capacity.