【MU】Micron and General Motors sign long-term chip supply agreement

U.S. memory chip giant Micron (Micron, MU) and General Motors (GM, 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, supporting GM's next-generation automotive platforms. The two parties will also collaborate on future technology engineering, including memory roadmaps, validation, and certification work.

Micron stated that AI in-cabin experiences, advanced driver-assistance systems (ADAS), and autonomous driving features are driving up 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, said advanced chips are central to future vehicle features, and the strategic agreement with Micron helps the company deliver innovative technology to customers while mitigating critical supply chain risks.

GM noted that this agreement is about securing the semiconductor supply chain in advance, not a response to any operational disruptions.

Supported by U.S.-Manufactured Capacity

The agreement will be backed by Micron's expanding U.S. manufacturing footprint, including its memory chip fab in Manassas, Virginia, which recently completed a modernization upgrade.

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

GM Is One of 16 Strategic Customer Agreements

The GM agreement is one of 16 strategic customer agreements Micron mentioned in its third fiscal quarter. When Micron reported its third-quarter results 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 secure supply and protect profit margins. Micron also disclosed that its remaining performance obligations were approximately $100 billion.

DRAM Prices Up About 70% Since December

According to an S&P Global Mobility report, 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 a critical component in automotive production, used in advanced driver-assistance systems and power-hungry in-vehicle infotainment systems.

Micron Up Over 3x This Year

Micron's stock has risen more than threefold this year, with its market cap briefly surpassing $1 trillion. The shares fell about 13% on Tuesday, tracking the broader market decline.