Micron has signed 16 long-term customer agreements that commit major buyers to purchasing DRAM and NAND memory over several years, with pricing terms designed to protect the chipmaker from a future market downturn.
Most of the agreements run for five years, covering the period from 2026 until the end of 2030. Contracts with automotive customers generally run for three years.
The deals collectively represent approx. 20% of Micron’s DRAM volume and one-third of its NAND volume during the agreement period. They cover customers across the data centre, consumer electronics and automotive sectors.
Price floors are designed to protect Micron’s margins
The agreements are structured on a take-or-pay basis, meaning customers have made binding commitments to purchase specified volumes of memory whether they ultimately require the full allocation or not.
Micron said its largest agreements generally include a maximum price based on current second-quarter 2026 market rates, alongside a minimum price that will remain in place throughout the contract.
Those minimum prices have been set at levels that Micron expects will deliver gross margins above the company’s previous quarterly peak in any earlier memory cycle.
Some agreements instead use fixed prices, while a smaller portion will continue to follow market conditions without defined pricing bands. Once Micron completes all its planned customer agreements, contracts with fixed pricing or ceilings close to current market rates are expected to represent approximately 40% of its revenue.
This does not mean every Micron memory product will remain fixed at today’s price until 2030. However, it limits how far prices can fall under a significant portion of its contracted business, giving the company more protection against the severe downturns that have historically affected memory manufacturers.
The contracts carry around $100 billion in minimum revenue
Fourteen of the 16 signed agreements represent approximately $100 billion in cumulative revenue at their minimum contracted prices over the remaining terms.
Micron also expects to receive $22 billion in customer deposits and related financial commitments, including around $18 billion in cash deposits. The company ultimately wants half or more of its total revenue to fall under these strategic customer agreements.
The contracts involve four very large customers, three medium-sized customers and several smaller automotive companies. Micron has not publicly identified the buyers.
In return for accepting long-term purchasing and pricing commitments, customers receive more predictable access to DRAM, NAND and, where required, high-bandwidth memory during a period of constrained supply.
Micron does not expect the memory shortage to end soon
Micron expects demand for DRAM and NAND to continue exceeding available supply beyond 2027. Although industry production could begin improving gradually during 2028, the company said it still cannot predict when supply will fully catch up with demand.
AI data centres remain a major source of growth, particularly as new accelerators require increasingly large quantities of high-bandwidth memory. Producing more HBM can also place additional pressure on the supply of conventional DRAM because it consumes greater manufacturing capacity.
Increasing overall production is not a quick process. New fabrication plants require years of construction, specialist workers, regulatory approvals and extensive energy infrastructure. Manufacturing transitions are also becoming more complex, while some suppliers have redirected cleanroom capacity from NAND production towards more profitable DRAM products.
What this could mean for RAM and SSD prices
The agreements do not directly set retail prices for desktop RAM, laptops, smartphones or SSDs. Consumer pricing will still depend on competition between memory suppliers, device demand, inventories and the individual contracts negotiated by manufacturers.
However, the deals indicate that some of the world’s largest technology companies are willing to accept high minimum prices in exchange for guaranteed supplies through the end of the decade.
Micron’s average DRAM selling prices increased by a percentage in the low 60s during its latest quarter, while NAND prices rose by a percentage in the mid-80s. Its consolidated gross margin consequently reached a record 84.9%.
With a substantial portion of future production now protected by price floors and take-or-pay commitments, customers hoping for another rapid collapse in memory prices may have to wait considerably longer than they did during previous industry cycles.
FAQ
Has Micron fixed memory prices until 2030?
Not entirely. Many of Micron’s agreements use minimum and maximum price bands, while others have fixed prices or continue to follow market conditions. Most of the contracts run until the end of 2030.
What is a take-or-pay memory agreement?
A take-or-pay agreement requires a customer to purchase an agreed volume of memory or provide payment even when it does not use the entire allocation. In return, the customer receives more reliable access to supply.
Will RAM and SSD prices remain high for five years?
The contracts increase the likelihood that memory pricing will remain elevated, but they do not directly determine retail prices. Competition, consumer demand, production increases and wider economic conditions will continue to affect the cost of RAM and SSDs.
