Micron's 16 supply deals cover 40% of revenue

The contracts

Micron said the agreements commit customers to buy set quantities at a price band with a floor and a ceiling. The floor locks in a gross margin that CEO Sanjay Mehrotra called "well above our peak quarterly margins in any past cycle"; the ceiling insulates buyers if memory prices rise further. Customers pay up front, which Micron said helps fund fab expansions.

The 16 agreements, most covering 2026 to 2030, will account for 40 percent of Micron's revenue, Mehrotra said during the company's fiscal third-quarter earnings call in June 2026.

Record quarter and guidance

Micron's fiscal third-quarter revenue was $41.5 billion, a fifth consecutive quarterly record and a 346 percent jump from a year earlier. DRAM revenue reached $31.3 billion, up 343 percent, and NAND revenue rose 361 percent to $9.9 billion. Net income was $28.9 billion, and consolidated gross margin was 84.9 percent.

Micron told investors to expect $50 billion of revenue in the fourth quarter at a gross margin of approximately 86 percent. For fiscal first-quarter 2027, it forecast $61.5 billion of revenue and an 86.25 percent gross margin, implying gross profit above $53 billion. The $61.5 billion guidance is about 23 percent above the $50 billion midpoint of fourth-quarter guidance. Micron put earnings per share at $38.15, plus or minus $1.00, on roughly 1.15 billion shares. Its shares rose 15 percent in after-hours trading after the June results.

Supply stays tight

Mehrotra said demand will exceed supply in calendar 2027 and 2028, and that both years will be tighter than 2026. "We do not have line of sight to when supply and demand will return to balance," he said. Micron expects DRAM and NAND shipments to grow in the low-to-mid 20s percentage range for the next two years.

IDC projects global DRAM supply growth of 16 percent in 2026 and NAND growth of 17 percent, both below historical norms. Mehrotra has said Micron can fulfil only 50 percent to two-thirds of some key customers' demand. Tom's Hardware reported that Micron has already sold most of its capacity for 2027.

What buyers pay

Gartner predicts PC prices will rise 17 percent in 2026. The solid-state drives inside PCs now cost two or three times what they did in December 2025, CNBC reported. IDC research manager Jitesh Ubrani said memory shortages will persist well into 2027.

Mehrotra said Micron expects a modest reduction in average server DRAM content growth as customers focus on maximizing unit shipments amid tight allocation.

New capacity is years away

Micron has said expanding high-bandwidth memory output uses up manufacturing capacity, while limited factory space and long construction timelines slow broader supply growth. New U.S. and Singapore volume is not slated to ship meaningfully until mid-calendar 2027 and 2028, according to 24/7 Wall St. Micron has outlined $250 billion of planned U.S. investment through 2035, Yahoo Finance reported.