Micron's specialty DRAM (SCAs) growing to 20% of output with trajectory toward 50% of long-term memory revenue.

Micron has significantly expanded its Strategic Customer Agreements (SCAs) portfolio, building on its recently announced strategic agreement with Anthropic covering AI memory and storage architecture design. The company has signed 16 SCAs to date, spanning approximately 20% of its DRAM output and about one-third of its NAND volumes over the contract period. According to CEO Sanjay Mehrotra, these strategic customer agreements are expected to account for roughly half—or even more—of Micron's total revenue once fully in place.

The SCAs provide Micron with a broad customer base and secure upfront payment commitments prior to delivery. The agreements span data center, consumer, and automotive markets and carry a combined value of US$22 billion in commitments. The contracts include take-or-pay provisions, cash deposits, and pricing floors designed to secure supply and support margin stability.

Each SCA incorporates binding volume commitments alongside pricing mechanisms that set an upper price cap tied to prevailing market levels from April to June, with a contractual price floor applied across the full contract term. Next-generation products such as high-bandwidth memory (HBM), DDR6, and LPDDR6 are priced separately through negotiated terms, preserving room for additional upside.

The true scale of these agreements extends well beyond the headline US$22 billion figure. Remaining performance obligations (RPOs)—a key indicator of contracted future revenue—across Micron's current agreements stand at approximately US$100 billion, according to the company.

Unlike traditional annual long-term supply agreements, SCAs lock in both volume and pricing over a five-year term (or three years in the automotive segment), effectively pre-agreeing key commercial terms over the contract duration. This visibility into demand and locked-in volumes enables Micron to invest with greater confidence, according to CFO Mark Murphy.

From an industry perspective, these long-term agreements with floor and ceiling pricing mechanisms could incentivize suppliers to accelerate capacity expansion during 2027–2030 to fulfill committed demand, potentially creating additional upside for industry-wide supply growth.

Micron's memory competitors are expected to follow this trend. South Korean players such as Samsung Electronics and SK hynix stand to benefit from similar agreements over the medium to long term. Evidence of this shift is already emerging: SK hynix is structuring long-term DRAM agreements with Microsoft and Google to include advance payments of around 10–30% of total contract value. At the core of the Microsoft deal is a three-year DDR5 supply agreement starting this year, while discussions with Google involve a long-term DRAM contract of up to five years with a possible two-year extension tied to next-generation HBM supply.