【MU】Micron signs long-term chip supply agreement with General Motors

U.S. memory chip giant Micron (MU) and General Motors (GM) signed a long-term supply agreement on Wednesday (July 1) to provide memory and storage solutions for GM's next-generation vehicle platforms.

GM Locks in LPDRAM, NOR, and UFS NAND

The agreement covers LPDRAM, NOR, and UFS NAND products to support GM's next-generation automotive platforms. The two parties will also collaborate on future technologies, including memory roadmaps, validation, and certification efforts.

Micron noted that AI in-cabin experiences, advanced driver-assistance systems (ADAS), and autonomous driving features are driving higher demand for memory and storage solutions in vehicles.

General Motors: Reducing Supply Chain Risk

Jeff Morrison, GM's Senior Vice President of Global Purchasing and Supply Chain, stated that advanced chips are central to future vehicle functionality, and the strategic agreement with Micron helps the company deliver innovative technology to customers while reducing key supply chain risks.

GM stated that the agreement is aimed at securing the semiconductor supply chain in advance, not in response to any operational disruptions.

Supported by U.S. Manufacturing Capacity

The agreement will be supported by Micron's expanding U.S. manufacturing footprint, including its recently modernized memory chip plant in Manassas, Virginia.

Micron invested $2 billion in modernizing the Manassas facility, which began production earlier this year, helping to ensure supply stability for the longer lifecycle of automotive products.

GM Is One of 16 Strategic Customer Agreements

The GM agreement is one of 16 strategic customer agreements mentioned by Micron in its third fiscal quarter. When Micron reported its third-quarter earnings last week, it disclosed that these 16 agreements cover data center, consumer, and automotive markets, with customers committing a total of $22 billion to secure memory chip supply.

Some agreements include "take-or-pay" commitments, cash deposits, and price floors to lock in supply and protect margins. Micron also disclosed remaining performance obligations of approximately $100 billion.

DRAM Prices Up About 70% Since Last December

According to a report by S&P Global Mobility, DRAM prices have risen about 70% since last December. Surging demand from AI data centers has tightened memory chip supply; automakers are also looking to strengthen their semiconductor supply chains to support the increasing computing needs of modern vehicles.

Memory chips have become critical components in automotive production, used in advanced driver-assistance systems and power-intensive in-vehicle infotainment systems.

Micron Up More Than 3x Year-to-Date

Micron's stock has risen more than threefold year-to-date, with its market cap briefly surpassing $1 trillion. The stock pulled back about 13% on Tuesday in line with the broader market.