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

Everyday Economic News Reporter: Xu Shuai Editor: Liao Dan

After experiencing a 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 core raw material costs for the next two years.

The company disclosed on the evening of March 24 that it has signed a 24-month procurement contract with a certain “storage original manufacturer,” but the identity of this supplier 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 Purchase Order, 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.

It is noteworthy that, due to commercial secrets, Baiwei Storage has been exempted from disclosing the name and related information of the supplier. The announcement states that the company has completed 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 (integrated device manufacturer) companies that control the core processes and capacity for manufacturing 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 companies 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 reveals 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 total annual procurement, with Supplier One and Supplier Two contributing 3.838 billion yuan and 1.333 billion yuan respectively, representing 29.41% and 10.21% of total procurement.

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.”

Proactively Locking in Capacity 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 purchase 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 then rebounding” pattern: 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 rebounded in Q4 by 33%-38% and 45%-50%.

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

The annual report shows that in 2025, Baiwei Storage achieved operating revenue of 11.302 billion yuan, up 68.82% year-over-year; 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 operating procurement expenses. As of the end of 2025, the company’s inventory reached 7.868 billion yuan, a year-over-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.

Daily Economic News