Micron has just revealed its latest earnings, reporting record revenue and profits, along with some very long-lasting deals that lock in prices for memory for years to come. While Micron shuttered its Crucial consumer RAM brand already, its allocation of memory production to data centers for years to come, and the guarantee of high prices for those chips, suggest PC RAM could remain expensive and hard to come by for a long time.
In its Q3 earnings report, Micron revealed it had signed 16 “strategic customer agreements” (SCAs), which are long-term agreements with customers that lock in floor and ceiling prices for its memory, in this case for five years at a time. The overall production capacity of this could mean the best PC RAM remains at least as expensive as it currently is for years to come.
Micron isn’t the only maker of memory, with Samsung and SK Hynix making up the other two names of the big three. Samsung and SK Hynix are both based in Korea, with Samsung being the largest manufacturer of memory products overall, which include PC RAM, SSDs, and VRAM. Micron, meanwhile, is an American company that used to include the Crucial consumer memory/SSD brand, but which has now switched completely to business-to-business production.
Speaking about the benefits of these SCAs in its earning call, Micron CEO, president, and chairman Sanjay Mehrotra explained, “Our customers are recognizing that supply shortages in memory and storage will take considerable time to improve” and that “as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand.”
Regarding the latter point about supply, companies like Micron aren’t sitting idle just producing at their current rate. They are building new chip fabs and looking at ways to improve production capacity. However, Mehrotra explains that “supply is structurally constrained in its growth and ability to meet industry demand, despite our comprehensive efforts to increase supply”.
Exactly how this will play out over the coming years depends on a large number of factors, including whether production can be improved, whether the AI bubble bursts to some extent, and whether AI infrastructure shifts to different models (both in terms of how data centers work, and if we all just end up running AI locally instead). However, it’s looking likely that any tech product that requires a reasonable amount of RAM is going to remain at an inflated price for longer than we hoped.
