Micron is looking to end the memory industry's boom-bust cycle

Micron (MU) reported blowout third quarter results this week, easily beating Wall Street's expectations on the top and bottom lines, as well as gross margins, as demand for its memory and storage chips continues to soar.

The company also provided a better-than-anticipated outlook for its current quarter in its report on Wednesday, sending Micron stock rocketing 15% higher.

How do Micron's strategic customer agreements work?

What capacity constraints is Micron currently facing?

How is Micron avoiding the memory market's boom-bust cycle?

What drove Micron's blowout third quarter results?

While the AI-driven chip shortage shows no sign of ending this year or next, which should continue to pad Micron's sales, the company is taking early steps to ensure it doesn't fall back into the memory market's traditional boom-bust cycle.

Memory companies regularly vacillate between periods of strong sales where there's a dearth of chips, followed by a bust as manufacturing capacity catches up to demand, leading to a glut of memory components.

Micron is attempting to insulate itself from that with a new business model that locks customers into long-term contracts.

"We feel like we have a t

Fuente original: Yahoo Finance (https://finance.yahoo.com/technology/article/micron-is-looking-to-end-the-memory-industrys-boom-bust-cycle-193630909.html)