Elon Musk praises Micron for being reasonable on future memory prices while calling other memory makers extortionate
@RealNickMugalli Micron has been reasonable regarding future memory prices, while others have been extortionate, which is something today’s customers won’t forget … Micron is making is the smart move for long-term customer loyalty.
Context
With AI driving a severe memory shortage, the world's biggest buyers are starting to reward or punish suppliers based on pricing, which could reshape long term contracts.
Musk was replying to investor Nicholas Mugalli, whose post summarizes what he called a new JPMorgan note, so those figures are secondhand. The numbers he cites, including 26 long term deals and $150 billion of contracted backlog, match Micron's own recent disclosures as reported by The Elec, so they are not new. Musk did not name the companies he called extortionate.
Deep dive
On October 13, Elon Musk replied to Nicholas Mugalli: Micron has been reasonable regarding future memory prices, while others have been extortionate, which is something today's customers won't forget. He added that Micron is making the smart move for long term customer loyalty.
Mugalli had posted that JPMorgan put out a new note that is super bullish on memory and storage, writing that Micron now has 26 long term deals covering more than 35% of revenue through 2030, $150 billion in contracted backlog, $32 billion in customer cash already committed and over 75% of next year's output already sold. The JPMorgan note itself was not available to check.
The Elec reported that Micron has signed 26 strategic customer agreements, legally binding take or pay contracts, expected to supply more than 35% of projected revenue through 2030. It said minimum contracted backlog is about $150 billion at floor prices, customer commitments total $32 billion, mostly in cash, and about 75% of expected agreement revenue has a pricing mechanism, mostly with floors and ceilings.
Yahoo Finance reported that JPMorgan's analyst, identified by Yahoo as Sur, described Micron's price moderation as a strategic decision to preserve customer relationships and lock in long term commitments rather than a sign of weaker demand, which matches Musk's point.
What to expect next
Watch whether other memory makers such as SK hynix and Samsung respond with similar long term pricing deals, or keep charging high spot prices while supply is tight.
Also watch whether Musk's companies sign or expand supply agreements with Micron, which would suggest his comments reflect actual purchasing decisions. Micron's next quarterly report will also show whether its contract strategy keeps margins high.