Micron signed 16 long-term supply agreements worth $100 billion total for DRAM and NAND; announced no visibility to shortage end.

In a world where memory is no longer a commodity but a strategically valuable asset, large consumers are committing to long-term supply agreements (LTAs) with their suppliers to secure steady supply of 3D NAND and DRAM. Micron this week announced it has signed 16 strategic customer agreements (SCAs), with 14 of them representing approximately $100 billion in cumulative minimum contract revenue over the remaining agreement terms. The company expects to receive cash deposits and other financial commitments totaling $22 billion from these customers.

"14 of the 16 SCAs that we have signed have a cumulative revenue at minimum price per our contracts of approximately $100 billion over the remaining agreement term," Micron stated. "Under the SCAs we have signed so far, we project to receive cash deposits and related financial commitments of $22 billion."

The $100 billion figure represents guaranteed baseline revenue assuming customers purchase only minimum committed volumes at minimum contract prices. In reality, Micron can earn substantially more if customers increase volumes or pay premium pricing. The customer commitments include upfront cash deposits or equivalent binding financial commitments to reserve future memory supply.

Micron signed these agreements with four "very large customers" and three "medium-sized customers"—accounts that previously did not commit to long-term LTAs. The contracts carry five-year terms (with automotive agreements at three years), running from calendar 2026 through 2030. The 16 contracts collectively represent approximately 20% of Micron's DRAM volume and 33% of its NAND volume through 2030.

Historically, Micron and other memory producers inked LTAs only with select clients like Apple and Nvidia. Signing 16 LTAs marks a significant shift in business approach for the company. Memory supply shortages are expected to persist through 2027, with only gradual improvement anticipated in 2028. "With respect to supply, our customers are recognizing that supply shortages in memory and storage will take considerable time to improve," said Sanjay Mehrotra, Micron's chief executive. "Even as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand."