this post was submitted on 25 Jun 2026
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Micron locks in historically high memory prices for five years (www.theregister.com)
submitted 18 hours ago by ryper@lemmy.ca to c/technology@lemmy.world
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Memory-maker Micron has found a way to keep prices for its products sky-high for another five years, by signing 16 “strategic customer agreements” (SCAs) that include a floor price the company says comes with “a very robust gross margin for Micron, well above our peak quarterly margins in any past cycle.”

Micron CEO, president and chairman Sanjay Mehrotra explained the SCAs in prepared remarks delivered during the company’s Q3 earnings call. He explained that Micron has signed 16 SCAs, most of them covering 2026 to 2030, and that they involve a commitment to buy a certain quantity of product and pay for it in a pricing band that has a floor and a ceiling price. The floor price covers the historically high gross margins mentioned above, and the ceiling price means those who commit to an SCA are insulated if memory prices go even higher.

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[–] melsaskca@lemmy.ca 35 points 5 hours ago (1 children)

"Locks in"...if all of a sudden there was no demand you can be assured they would "lock out". Micron likes to put the boot to the throat when they have an advantage. Not someone I'd do business with.

[–] AEsheron@lemmy.world 1 points 3 hours ago (2 children)

Yeah, everyone was paying to back out of their contracts as soon as the prices went through the roof. The customers will do the same when they come back down if they are stuck in these contracts.

[–] badgermurphy@lemmy.world 4 points 2 hours ago

I believe that most of the customers signing these agreements are also the ones responsible for the memory shortage in the first place, and will go bankrupt when the AI bubble bursts, so the contracts will be voided in bankruptcy court.

[–] 3abas@lemmy.world 1 points 3 hours ago

Assuming these customers are the reason for the price hikes, their backing out is the demand loss needed to bring prices back down.