Micron Signs 16 Long-Term Contracts, Securing 20% of DRAM and One-Third of NAND

Micron Technology (MU) has signed 16 strategic customer contracts to meet the demand for memory in AI servers. The contracts cover approximately 20% of DRAM and one-third of NAND from 2026 to the end of 2030. Micron reported that its revenue for the third quarter of fiscal year 2026 reached $41.46 billion, exceeding $23.86 billion in the previous quarter and $9.31 billion in the same period last year, with a non-GAAP gross margin of 84.9%. The contracts are structured as 'take-or-pay,' requiring customers to purchase the specified quantities, while Micron reduces performance volatility through minimum contract prices and cash deposits. Micron expects cumulative revenue of about $100 billion from 14 of the contracts. The industry is increasingly concerned about supply shortages, with the CEO of SK Hynix predicting that 2027 will be the most challenging year in terms of supply. Conversely, there are also concerns that the production expansion by China's CXMT could lead to oversupply. Micron plans to increase its investments in fabs and technology in the U.S. to over $250 billion by 2035.

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