Following significant price volatility in the memory chip market during 2025, Biwin Storage Technology Co.,Ltd. (SH688525), a listed storage solutions provider, has moved to secure its core raw material costs for the next two years through a $1.5 billion fixed-price, long-term supply contract.
The company disclosed that it has entered into a 24-month procurement agreement with a major "storage manufacturer." The identity of this supplier has not been disclosed due to commercial confidentiality.
The global NAND Flash market is predominantly controlled by a few Integrated Device Manufacturers (IDMs) such as Samsung, SK Hynix, Kioxia, Micron, and Western Digital. As an independent storage solutions provider, Biwin Storage has established long-term, stable cooperative relationships with major storage wafer manufacturers.
According to the announcement, the contract stipulates that Biwin Storage will purchase a specific storage wafer product from the supplier based on agreed-upon quantities, prices, and schedules. The total committed purchase amount is $1.5 billion USD. The procurement period spans 24 months, from the second quarter of 2026 to the first quarter of 2028, with purchases to be made evenly throughout the period at a locked-in price.
Notably, citing commercial secrets, Biwin Storage has been exempted from disclosing the supplier's name and related details. The announcement states that the company has completed internal procedures for exempting this information from disclosure.
In the semiconductor storage industry chain, the term "storage manufacturer" specifically refers to IDM companies that control the core manufacturing processes and production capacity for storage wafers. Unlike typical chip design firms, these manufacturers integrate chip design, wafer fabrication, and packaging/testing under one roof, forming the source and core of the global storage supply chain.
Information from Biwin Storage's 2025 annual report shows its upstream suppliers are highly concentrated among a few global storage wafer giants. The report indicated that purchases from its top five suppliers accounted for 66.41% of its total annual procurement.
The company explained that signing this contract will help enhance the stability of its medium to long-term storage wafer supply and mitigate the impact of price fluctuations on costs. The annual purchase volume for the product under this contract represents 11.1% of the company's total NAND Flash purchases and 18.01% of its total sales for 2025, indicating the associated risk is relatively small and manageable overall.
The storage wafer market is characterized by long-term cyclical fluctuations, with prices heavily influenced by supply and demand dynamics. Data from the annual report showed the storage industry experienced a reversal in 2025, with prices declining sharply in the first half of the year before rising significantly in the second half, driven by accelerated adoption of AI applications.
Such price volatility poses challenges for downstream storage manufacturers in terms of cost control and profitability. By securing this fixed-price, long-term agreement, Biwin Storage aims to hedge against potential price swings for a portion of its raw materials over the next two years, providing more predictable costs for its business operations.
The annual report also disclosed that the company achieved operating revenue of 11.302 billion yuan in 2025, a year-on-year increase of 68.82%. Its net profit attributable to shareholders was 853 million yuan, surging 429.07% compared to the previous year. However, net cash flow from operating activities was negative 1.965 billion yuan, primarily due to increased procurement expenditures. The company's inventory balance reached 7.868 billion yuan by the end of 2025, an increase of 122.44% year-on-year.
Biwin Storage emphasized in its report that it will continue to deepen cooperation with global major storage wafer manufacturers and pursue long-term supply agreements to secure stable wafer production capacity.
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