Micron Technology CEO reveals supply chain agreements now covering 50% of revenue

Micron Technology is done playing the memory market’s boom-and-bust game on a quarter-by-quarter basis. CEO Sanjay Mehrotra announced during the company’s fiscal Q2 2026 earnings call on March 18 that Micron has signed its first Strategic Customer Agreements, multi-year contracts that lock in specific volume and supply commitments with major customers.

The numbers are significant. These SCAs currently cover approximately 20% of Micron’s DRAM volume and roughly 33% of its NAND volume, with the company projecting that over 50% of total revenue will eventually flow through these agreements.

What these agreements actually mean

The first agreement signed is a five-year deal, which Mehrotra described as a robust multi-year pact with specific commitments. That’s an unusually long horizon for the memory industry, where pricing has historically swung wildly based on supply-demand dynamics that shift every few quarters.

For Micron, the benefit is straightforward: revenue visibility. Memory companies have traditionally been at the mercy of cyclical pricing, where a glut of supply can crater margins overnight. Locking in volume commitments gives the company a floor to plan around.

The AI demand engine

Mehrotra highlighted ongoing discussions with hyperscalers and other major customers, the very companies building out massive AI infrastructure that requires enormous quantities of advanced memory.

Micron is backing up these commitments with serious capital. The company has ramped fiscal year 2026 capital expenditures to $25 billion, a figure that reflects the scale of expansion needed to fulfill both existing demand and the new obligations created by these strategic agreements.

Why this matters beyond Micron

For investors evaluating Micron, the SCA framework introduces a fundamentally different risk profile than what the company has historically presented. Memory stocks have traditionally been among the most cyclical in the semiconductor space, with share prices capable of doubling or halving within a single cycle. If over 50% of revenue becomes tied to multi-year agreements with defined volumes, the earnings volatility that has defined Micron for decades could moderate substantially.

The $25 billion capex commitment does introduce execution risk. Building out that much capacity assumes sustained demand at levels that justify the investment.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.