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.
Aren’t the data center deals only finalized and paid upon actual completion of the project? Like that’s part of what makes the AI thing a bubble - companies are trading IOUs. I pinky swear to buy these chips once I have the data centers to house them in and the data centers have the power, water, etc from local infrastructure needed to operate and you pinky swear you’ll have the actual physical goods available at that time to fulfill that order.
What happens if a large amount of these pinky swears, which inflated stock prices are built on top of, fall through?
Are you asking me to look that up for you?
You probably could have looked it up in the time you took to go on a hypothetical and wait for me to respond.
And you could have looked up information instead of vomiting nonsense everywhere but instead we’re here.
I just figured that since you’re such an obvious expert on the subject, you’d just know.