Big buyers agree to deals that will deliver historically enormous margins and profits

Memory-maker Micron has found a way to keep prices for its products sky-high for another five years, by signing 16 “strategic customer agreements” (SCAs) that include a floor price the company says comes with “a very robust gross margin for Micron, well above our peak quarterly margins in any past cycle.”

Micron CEO, president and chairman Sanjay Mehrotra explained the SCAs in prepared remarks delivered during the company’s Q3 earnings call. He explained that Micron has signed 16 SCAs, most of them covering 2026 to 2030, and that they involve a commitment to buy a certain quantity of product and pay for it in a pricing band that has a floor and a ceiling price. The floor price covers the historically high gross margins mentioned above, and the ceiling price means those who commit to an SCA are insulated if memory prices go even higher.

  • givesomefucks@lemmy.worldEnglish
    15·
    2 days ago

    It’s a company like the others but must get in the global maket in someway and this is a good way.

    Buddy…

    If they can make 5 million selling consumer of 500 million selling to data centers…

    They’re going all in on data center.

    • grinning_serpent@lemmy.worldEnglish
      11·
      23 hours ago

      Aren’t the data center deals only finalized and paid upon actual completion of the project? Like that’s part of what makes the AI thing a bubble - companies are trading IOUs. I pinky swear to buy these chips once I have the data centers to house them in and the data centers have the power, water, etc from local infrastructure needed to operate and you pinky swear you’ll have the actual physical goods available at that time to fulfill that order.

      What happens if a large amount of these pinky swears, which inflated stock prices are built on top of, fall through?

      • givesomefucks@lemmy.worldEnglish
        11·
        23 hours ago

        Aren’t the data center deals only finalized and paid upon actual completion of the project?

        Are you asking me to look that up for you?

        You probably could have looked it up in the time you took to go on a hypothetical and wait for me to respond.

        • grinning_serpent@lemmy.worldEnglish
          1·
          21 hours ago

          And you could have looked up information instead of vomiting nonsense everywhere but instead we’re here.

          I just figured that since you’re such an obvious expert on the subject, you’d just know.

    • MrSoup@lemmy.zipEnglish
      31·
      2 days ago

      Yes but you don’t simply sell to datacenters. Who build them must buy from you. But who the hell know you? That’s the point.

      • givesomefucks@lemmy.worldEnglish
        12·
        2 days ago

        Yes but you don’t simply sell to datacenters. Who build them must buy from you. But who the hell know you? That’s the point.

        What?

        Legitimately, what are you even trying to convey here?

        Edit:

        Do you mind sharing what country you’re from?

        Because it seems like everyone in here saying China will but anything over profits is people either from China or an instance that constantly defends China…

        • MrSoup@lemmy.zipEnglish
          2·
          2 days ago

          Do you mind sharing what country you’re from?

          I would prefer not to dox myself, but I’m from Europe.

          What I’m trying to say here is that more competition in a so oligopolistic market would helps bring prices down. I’m not licking China boots here, it could have been even the brits I don’t care.

          • givesomefucks@lemmy.worldEnglish
            1·
            2 days ago

            What I’m trying to say here is that more competition in a so oligopolistic market would helps bring prices down.

            No one is saying that’s wrong.

            I’m saying that those companies wouldn’t stop making something with a $1k profit per unit to make something with a $100 profit per unit product.

            Consumers will never be willing/able to pay the prices datacenters will pay.

            For companies to start switching back to consumer ram. Either the AI bubble needs to burst so demand goes away, or consumers have to be desperate enough to see our prices keep skyrocketing.

            They may even know the bubble will burst, at least understand that they won’t keep being built at this rate. But it costs money to switch, there is zero reason to switch before that math changes, because it’s a relatively quick and easy switch.

            Like…

            What aren’t people understanding here?