1HBM High-bandwidth memory
HBM is ordinary DRAM memory, stacked into a tower and parked right next to the AI processor. Micron's own definition: “a specialized, high-performance 3D-stacked SDRAM architecture.”
Regular server memory is a narrow road that runs very fast. HBM is a street over a thousand lanes wide, built right outside the processor's front door. Micron says one HBM stack has a 1,024-bit data interface, “16 times wider than that of a standard DDR5 module.” Micron's pitch is that it keeps the processor “busy rather than waiting for data.”
More than 2.8 terabytes a second, per stack, for Micron's HBM4. That is 2.3 times the generation before it (HBM3E).
Micron's fiscal Q4 call on September 30: HBM revenue grew faster than the company, and Micron said it has “completed agreements for the vast majority of our calendar 2027 HBM bit supply.” Next year's HBM is already sold.
HBM is not a new kind of memory cell. It is the same DRAM, stacked and wired differently. That matters because HBM and the memory in your laptop come out of the same factories. When AI buyers take more HBM, there is less ordinary DRAM to go around, which is why Micron expects the industry to “remain supply constrained” through 2027 and 2028.
2SCA Strategic customer agreement
An SCA is a multi-year contract where a big customer promises to buy a set amount of memory, usually at a price inside a floor-and-ceiling band, and puts cash down to hold its place in line. Micron calls them “multi-year take-or-pay agreements.” SK hynix and Nanya use a plainer name for the same idea: long-term agreements, or LTAs.
A season ticket. You pay a deposit, your seat is guaranteed for five years, the price can move but only inside a band, and if you stop coming to games you still owe for the seat. That last part is what “take-or-pay” means.
26 agreements, $32 billion of customer commitments, “the vast majority of which are cash deposits.” Micron estimates the SCAs at “over 35% of our revenue through 2030”, and some now run into 2031. For scale, $32 billion is close to Micron's entire revenue for fiscal 2025, about $37.4 billion (derived from the $133.2 billion fiscal 2026 total and its 256% growth).
All over the memory prints this fall. Micron disclosed the 26 SCAs on September 30. Nanya's third-quarter deck said its price increases “primarily reflect renewed long-term agreements” (our read). SK hynix told analysts in July that long-term deals cover about half its sales, on terms of about five years (our read; that figure comes from call summaries, unverified).
The deposit is not revenue. Micron books the deposits under financing, so they “do not affect our free cash flow”, and they get paid back: the deposits “will be returned to customers over time, toward the latter half of each agreement's term, assuming minimum purchase requirements are met.” Think of it as collateral. The customer gets it back only if it keeps buying.
3RPO Remaining performance obligations
RPO is the dollar value of everything a company has a signed contract to deliver but has not delivered yet. It is the accounting line where signed-but-unshipped sales show up.
The reservation book at a restaurant. Every booked table is in it, none of them has been served, and the owner can count the money before the kitchen cooks anything.
About $150 billion. That is more than Micron's record fiscal 2026 revenue of $133.2 billion, so the company has more than a full year of its best-ever sales already on the books. One quarter earlier, the Q3 call put it at about $100 billion across 14 agreements.
Mark Murphy, Micron's chief financial officer, on the same September call: RPO “is based on committed volumes and minimum pricing and is inherently conservative.” Cloud and software companies report the same line; it means the same thing here.
RPO is a floor, not a forecast. Micron counts only the SCAs that have a set pricing framework, and only at the minimum price, so it says it expects actual revenue “to well exceed the associated RPO” over the contracts. A floor only matters if customers honor it when the open-market price falls below it. That has not been tested in this cycle yet.
Should you care?
If you follow chip stocks: memory has always been a boom-and-bust business, because most of it was sold at whatever the market paid that month. SCAs, deposits and a $150 billion RPO are the industry's attempt to sand the busts down. The thing to watch is not the next record quarter. It is the first quarter when open-market prices drop below the contract floors and customers have to decide whether to keep paying.
If you just buy laptops and phones: the same factories make your memory. Micron expects the industry to stay supply constrained through 2028, and contracts with AI buyers come first in line.
This is education, not advice. Nothing here says to buy or sell anything.