June 26, 2026 Memory chip maker Micron says it has signed 16 long-term strategic customer agreements that include price floors designed to guarantee what the company describes as historically high profit margins. Most of the agreements run from 2026 through 2030 and reflect customer concerns that memory supply shortages will persist for years, the company said.
Micron president and chief executive Sanjay Mehrotra said during the company’s third-quarter earnings call that the agreements commit customers to purchasing specified volumes of products within predetermined pricing bands featuring both floor and ceiling prices.
Mehrotra further revealed that the floor prices ensure “a very robust gross margin for Micron, well above our peak quarterly margins in any past cycle,” while ceiling prices protect customers from future price spikes.
The company said customers are agreeing to the deals because supply constraints across the memory industry are expected to continue. “Our customers are recognizing that supply shortages in memory and storage will take considerable time to improve,” Mehrotra shared. He added that while industry supply is expected to improve gradually beginning in 2028, Micron does not yet see when supply will fully catch up with demand.
According to Mehrotra, increasing complexity in manufacturing advanced memory products, including high-bandwidth memory used for artificial intelligence applications, is limiting the industry’s ability to expand output quickly, even as companies build new fabrication facilities.
The agreements currently account for about 40 per cent of Micron’s revenue, leaving the majority of the company’s inventory available for sales at negotiated market prices.
Micron also reported strong financial results for its third quarter. Revenue reached a record US$41.5 billion, marking the company’s fifth consecutive quarterly revenue record and a 346 per cent increase from a year earlier. DRAM revenue rose 343 per cent year-over-year to a record US$31.3 billion, while NAND revenue climbed 361 per cent to US$9.9 billion. Net income totalled US$28.9 billion and consolidated gross margin reached 84.9 per cent. For the fourth quarter, Micron forecast revenue of US$50 billion and gross margins of approximately 86 per cent.
The company also said customers are increasingly focusing on maximizing server shipments amid tight memory supplies. While Micron expects conventional server sales to grow by percentages in the mid-teens in 2026, it anticipates only modest growth in average server DRAM content.
Investors have reacted positively to the results, sending Micron shares up 15 per cent in after-hours trading.
