Micron’s Revenue Floor Is Locked In by Take-Or-Pay Contracts
Micron’s downside isn’t just memory prices; 16 take-or-pay contracts through 2030 establish a roughly $100 billion minimum revenue floor, with about 20% of DRAM volume and 25% of revenue already covered. Some deals cap the price for existing products, limiting upside even as management expects revenue to exceed the floor. Management projects substantial cash commitments from customers and says roughly half or more of future revenue could be under these agreements, while guiding Q4 2026 revenue near a record $50 billion. The exposure is concentrated among four very large and a few medium customers, providing visibility but raising concentration risk as the floor shapes the stock’s risk/reward rather than memory price moves.