- Micron has signed a strategic customer agreement with 16 clients through 2030.
- This pact has committed customers to buying memory from Micron at record-high prices with robust profit margins.
- According to the company’s CEO, there is no telling when the memory supply will meet the increasing demand.
The memory crisis has adversely affected every sector of the gaming world. From delayed console cycles to rising component prices, both companies and consumers have been left in dismay at the current state of affairs. Most players aren’t even planning to build a new gaming rig in the next two years due to the exorbitant prices.
With Phison’s CEO warning that shortages could last even longer than 2030, there seems to be no way out of this current predicament. Now, American memory maker Micron has signed a new agreement to lock in these outrageous prices for the next 5 years.
Why it matters: With memory makers locking in clients to high prices until 2030, it doesn’t seem like the gaming industry is going to get any sort of relief in the near future.
During the earnings call for its Q3 financial results, Micron revealed that it has signed a strategic customer agreement with 16 clients that includes a floor price with a robust profit margin for the company.
The company’s CEO, Sanjay Mehrotra, explained that most of these agreements will last until 2030, keeping the cost of Micron’s memory products high for another 5 years. Customers who have signed this deal are committed to buying a certain quantity of product and paying for it within a set price range.
The floor price in this agreement is set to bring in historically high gross profit margins for Micron, while the ceiling cost will protect customers if memory prices go even higher. The CEO stated that clients are locking into this agreement despite the high margins because memory shortages will take a considerable time to improve.
However, industry supply is expected to improve by 2028 according to Mehrotra, but there is no telling when it will catch up with the increasing demand. Regardless, Micron has committed over a dozen clients to paying record prices to procure memory, and this only accounts for 40% of its revenue.
Do you think the situation of the industry will improve after 2028? Are memory shortages going beyond 2030? Tell us in the comments below or head to the Tech4Gamers forum for discussion.
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Shameer Sarfaraz has previously worked for eXputer as a Senior News Writer for several years. Now with Tech4Gamers, he loves to devoutly keep up with the latest gaming and entertainment industries. He has a Bachelor’s Degree in Computer Science and years of experience reporting on games. Besides his passion for breaking news stories, Shahmeer loves spending his leisure time farming away in Stardew Valley. VGC, IGN, GameSpot, Game Rant, TheGamer, GamingBolt, The Verge, NME, Metro, Dot Esports, GameByte, Kotaku Australia, PC Gamer, and more have cited his articles.
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