Micron secured $22 billion in customer commitments and issued a stronger-than-expected forecast as AI-driven demand continues to strain global memory chip supplies.
Micron Technology reported stronger-than-expected quarterly results and issued an upbeat forecast, signaling that demand for memory chips used in artificial intelligence applications continues to outpace supply.
The company said customers have committed approximately $22 billion to secure future memory chip supplies, highlighting growing concerns over availability as AI-related demand accelerates. The commitments come through 16 strategic agreements spanning data center, consumer electronics and automotive markets. These contracts include take-or-pay provisions, customer deposits and pricing safeguards designed to guarantee supply while protecting Micron’s margins.
Micron, the only U.S.-based manufacturer of high-bandwidth memory (HBM) chips, has benefited significantly from the AI boom. HBM chips are a critical component in advanced AI systems and are widely used alongside Nvidia’s AI processors. Demand for these products has exceeded industry production capacity, allowing memory suppliers such as Micron, SK Hynix and Samsung Electronics to maintain premium pricing.
Chief Executive Sanjay Mehrotra said the company expects tight market conditions to persist beyond 2027 due to sustained AI demand and structural supply constraints. He added that Micron does not yet see a clear timeline for when memory supply will fully catch up with demand.
The company also disclosed that remaining performance obligations tied to its customer agreements have reached approximately $100 billion, providing significant visibility into future revenue. Industry analysts view the contracts as evidence of a broader shift in the memory sector, where customers are increasingly willing to commit capital and long-term purchasing agreements to secure access to critical components.
For the third quarter, Micron reported revenue of $41.46 billion, well above analyst expectations of $35.85 billion. Adjusted earnings came in at $25.11 per share, surpassing forecasts of $20.78 per share.
Looking ahead, Micron expects fourth-quarter adjusted earnings of about $31 per share, compared with Wall Street estimates of $25.84 per share. The company also plans to increase capital spending to approximately $10 billion as it expands manufacturing capacity to meet growing demand from AI customers.
