Micron announces $22 billion in long-term memory chip agreements with customers like Nvidia to mitigate boom-bust cycles.
Micron revealed $22 billion in long-term supply deals with customers, including Nvidia, to lock in demand for memory chips. These “take-or-pay” agreements require clients to purchase chips or pay penalties, aiming to stabilize revenue amid market volatility.
The move follows similar strategies by rivals Samsung and SK Hynix, as memory chipmakers seek to reassure investors about the durability of AI-driven demand. Memory stocks led a $1 trillion market rout earlier this week, fueled by concerns over valuations and cyclical downturns.
Analysts noted the deals improve visibility into future revenue, pushing downside risks further out. The focus shifts to monetizing pricing power while it lasts, as memory chips become critical for AI infrastructure.