Micron has locked in historically high memory prices for five years through 16 strategic customer agreements (SCAs) that include floor pricing. CEO Sanjay Mehrotra said these deals guarantee 'very robust gross margins' above peak quarterly levels from any past cycle, with customers protected by ceiling prices if memory costs rise further.

The SCAs cover 2026-2030 and require customers to purchase set quantities within pricing bands. Mehrotra cited persistent supply shortages that won't improve until well beyond 2028, with structural constraints limiting capacity growth despite new fab construction. The increasing complexity of advanced memory types means factories take longer to build and still won't meet combined AI and traditional memory demand.

Micron's Q3 results reflected these favorable conditions: $41.5 billion revenue marked a fifth consecutive record, while 84.9 percent gross margin and $28.9 billion net income shattered previous benchmarks. DRAM revenue hit $31.3 billion and NAND reached $9.9 billion, both up over 340 percent year-over-year. The company projects $50 billion Q4 revenue with margins near 86 percent.

However, IT professionals face tighter memory allocations as customers prioritize unit shipments over DRAM content. Server DRAM growth will slow in 2026 despite overall server sales increasing mid-teens percentages. Investors cheered the outlook, sending shares up 15 percent in after-hours trading.