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
    11·
    9 hours 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
      1·
      8 hours 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·
        8 hours 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?