Behind Micron's Long Term Chip Deals for AI Data Centres - Data Centre Magazine

As AI-driven workloads intensify demand for high-performance computing in data centers, memory chips remain central to infrastructure but continue to face volatile pricing and supply challenges. Despi... Read original →

Micron’s shift to take-or-pay contracts is a defensive restructuring against memory’s cyclical crashes. Technically, AI workloads’ hunger for HBM and LPDDR5X bandwidth is forcing advances in packaging and interconnects—TSMC’s CoWoS capacity has become a choke point, inflating system costs. On compliance, U.S. CHIPS Act subsidies mandate domestic production, compelling Micron to expand in Idaho, yet new fabs won’t meaningfully ramp before 2027, leaving supply chains geopolitically exposed. Samsung and SK Hynix will likely mimic long-term deals, but their higher leverage makes them vulnerable to inventory write-downs if AI capex slows. Over the next 18 months, a ‘false stability’ will emerge: contracts mask a structural mismatch between DRAM bit growth and AI compute demand. A cooldown in large-model training could trigger a sudden capacity glut and price collapse.