[News] Musk Says Micron Is “Making Room” for Tesla in the Years to Come, Hinting at Long-Term Memory Supply

Tesla CEO Elon Musk echoed Apple CEO Tim Cook’s concerns over the memory shortage, agreeing with Cook’s description of the crisis as a “hundred-year flood” and calling it “the biggest price jump in anything I’ve ever seen,” according to Business Insider. However, while the supply crunch persists, Musk said at Tesla’s July 22 earnings call that the company has secured sufficient memory chip supplies, thanking U.S. memory maker Micron for helping ensure availability.

Musk’s remarks also point to a potential long-term supply partnership between Tesla and Micron. According to an Investing.com transcript, he thanked the U.S. memory maker for “making room for Tesla in the years to come,” saying Micron had reserved a significant memory allocation for the company on reasonable terms despite today’s “pretty insane” memory prices.

Micron is not the only supplier highlighted by Musk. According to Nikkei, he said Samsung and TSMC are also making major investments to expand capacity for Tesla’s Optimus robots and autonomous ride-hailing vehicles. Their Texas and Arizona fabs, representing tens of billions of dollars in investment, will help support AI compute needs for robotics and autonomous driving, he added.

As noted by Nikkei, Tesla is currently working with Samsung to produce its AI5 chips at Samsung’s Texas fabs, while development of AI6 is already underway. According to Musk, the company’s next-generation in-house AI6 chip is set to become “the best edge computing chip in the world.”

Tesla Spotlight Puts Micron’s Long-Term Supply Deals in Focus

Notably, Musk’s comments put Micron’s strategic customer relationships in the spotlight, as the U.S. memory maker has previously highlighted long-term agreements primarily with automotive customers.

Unlike traditional annual long-term agreements (LTAs), Micron’s Strategic Customer Agreements (SCAs) typically lock in both pricing and supply volumes for three to five years. According to Investing.com, Micron said at its previous earnings call that it had secured 16 SCAs, covering roughly 20% of its DRAM output and about one-third of its NAND volumes over the contract period.

Micron’s SCA announcements have so far been dominated by automotive customers, including GM, Ford and seven auto suppliers such as Qualcomm, Denso and Astemo. However, the memory giant is expanding its long-term supply strategy beyond autos, signing a supply agreement with Anthropic in June for memory and storage products. Musk’s latest comments on Tesla’s secured memory supply further highlight Micron’s growing relationships with major AI-driven customers.

It is worth noting that the memory crunch seems to be continuously pressuring automakers. According to Yahoo! Finance, GM, one of Micron’s SCA customers, maintains its forecast for $1.5 billion to $2 billion in commodity inflation, including higher DRAM costs, up from the $1 billion to $1.5 billion range expected at the start of 2026.

Read more

• [News] Micron Expands Long-Term Memory Deals with 7 Auto Clients; Qualcomm, Harman Draw Attention
• [News] Micron Breaks Ground on Hiroshima Fab Expansion, Scaling 1γ DRAM and HBM Output as Equipment Set for 2H28

(Photo credit: Micron)