Micron joins rivals pitching AI deals as cure for memory's boom-bust cycle

By Stephen Nellis, Zaheer Kachwala and Aditya Soni

SAN FRANCISCO, June 25 (Reuters) - Memory chipmakers have for decades been trapped in boom-bust cycles, with capacity buildouts hitting the market just as demand craters. Micron, Samsung and SK Hynix are now trying to ‌convince investors this time is different, arguing long-term deals will keep cash flowing even if the datacenter boom bursts.

What makes Micron's current strategy different from past attempts?

What risks could undermine these long-term supply agreements?

Why are AI customers willing to pay billions upfront?

How are long-term deals changing memory chip industry dynamics?

Micron said on Wednesday ‌customers such as Nvidia had committed $22 billion to lock in supplies of memory chips, playing up huge growth in five-year "take-or-pay" deals that require clients to either buy its chips or ​hand over cash.

The U.S. company's deals follow the footsteps of SK Hynix and Samsung, which have also been signing long-term supply agreements with their customers.

However, it is still a risky bet and memory stocks remain prone to wild market swings, analysts said. Days before Micron's results, a tech stocks rout led by memory

Fuente original: Yahoo Finance (https://finance.yahoo.com/technology/articles/micron-joins-rivals-pitching-ai-152220056.html)