3 ms·

Yeah they're going to diversify... to one of the other two memory companies who will likely be raising their prices too, because why should they be suckers?

small_model 4mo ago
The suckers are those companies agreeing to this deal. 'Your margin is my opportunity' means prices will fall eventually once more production come on line. The invisible hand will slap their faces
- try-working 4mo ago
  nobody is agreeing to what the headline says. the SCAs are just a hedge against even higher prices. the agreements will be broken the second prices drop.
- regularfry 4mo ago
  "Eventually" doing a lot of work. Micron (and implicitly anyone signing this deal) are betting demand is going to outstrip capacity for several years, taking into account what new capacity can be brought online and when.
- rob74 4mo ago
  Well, apparently those companies believe memory prices will continue to rise, so they'd better lock in supply at the current (high) prices. We'll see if they're right...
- Arnt 4mo ago
  "... 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." So clearly 16 large buyers consider it likely that prices will go even higher. How likely? >10% chance? Likely enough to sign an agreement.
- ThrowawayR2 4mo ago
  It's a five year agreement. Good luck financing, constructing, equipping, and bringing new memory fabs online in less than 5 years.
- polski-g 4mo ago
  More production can only come online if the producers have money to do so. Turns out Apple fucked Micron in 2023 so they couldn't expand capacity: https://9to5mac.com/2026/06/25/micron-exec-suggests-apples-aggressive-purchasing-tactics-helped-fuel-memory-shortage/ https://9to5mac.com/2026/06/25/micron-exec-suggests-apples-a...
digitaltrees 4mo ago
I am not in favor of monopoly and cartels for this reason but if even one competitor doesn’t do this and the whole ecosystem rewards them it sends a signal

small_model 4mo ago

The suckers are those companies agreeing to this deal. 'Your margin is my opportunity' means prices will fall eventually once more production come on line. The invisible hand will slap their faces

try-working 4mo ago
nobody is agreeing to what the headline says. the SCAs are just a hedge against even higher prices. the agreements will be broken the second prices drop.
regularfry 4mo ago
"Eventually" doing a lot of work. Micron (and implicitly anyone signing this deal) are betting demand is going to outstrip capacity for several years, taking into account what new capacity can be brought online and when.
rob74 4mo ago
Well, apparently those companies believe memory prices will continue to rise, so they'd better lock in supply at the current (high) prices. We'll see if they're right...
Arnt 4mo ago
"... 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." So clearly 16 large buyers consider it likely that prices will go even higher. How likely? >10% chance? Likely enough to sign an agreement.
ThrowawayR2 4mo ago
It's a five year agreement. Good luck financing, constructing, equipping, and bringing new memory fabs online in less than 5 years.
polski-g 4mo ago
More production can only come online if the producers have money to do so. Turns out Apple fucked Micron in 2023 so they couldn't expand capacity: https://9to5mac.com/2026/06/25/micron-exec-suggests-apples-aggressive-purchasing-tactics-helped-fuel-memory-shortage/ https://9to5mac.com/2026/06/25/micron-exec-suggests-apples-a...

digitaltrees 4mo ago

I am not in favor of monopoly and cartels for this reason but if even one competitor doesn’t do this and the whole ecosystem rewards them it sends a signal