Micron and Sandisk Secure Long-Term Contracts Amid AI Chip Surge

Micron Technology and Sandisk have achieved record profit margins and significant stock growth in 2026, with Sandisk rising 480% and Micron jumping 220%. This surge is driven by depleted supplies and an all-time high in demand for memory chips used in artificial intelligence data centers, specifically for AI model training and inference.

To mitigate the industry's inherent cyclicality, both companies are moving toward long-term supply agreements. Micron has secured approximately 35% of its revenue through 2030, while Sandisk has signed about 50% of its clients to similar contracts. Micron is further expanding its market position through an industry-first partnership with Nvidia to develop custom high bandwidth memory (HBM) chips, moving away from standard off-the-shelf components.

Industry indicators from ASML, SK Hynix, and YMTC suggest that supply shortages for DRAM and NAND flash will persist through 2027 and potentially until 2029. Micron, which produces both DRAM and NAND flash, is raising HBM pricing for 2027 to sustain earnings growth. The company expects industry NAND and DRAM shipments to grow in the low to mid-20% range for 2027 and 2028, with HBM projected to grow faster than conventional DRAM.