Micron Technologies (NASDAQ: MU) blew away expectations with its most recent earnings report.
The company posted record profitability while quintupling revenue year over year
But perhaps the biggest takeaway from Micron’s earnings report was management’s disclosure of new strategic customer agreements (SCAs). Micron signed long-term agreements with some of its largest customers, creating more predictable demand and pricing for its chips over the next three to five years. That’s important because Micron’s biggest competitors, SK Hynix (KOSE: A000660) and Samsung (OTC: SSNLF), are about to invest huge sums of money in building out additional capacity.
It’ll be a major test for Micron’s new strategy. Micron’s biggest risk Memory chips are, in practicality, commodities. The market has seen a surge in demand over the past year as memory has become a bottleneck in artificial intelligence (AI) training and inference.