Micron Technology NASDAQ:MU and Ford Motor NYSE:F on Monday signed a long-term agreement to secure the supply for memory and storage platforms used in the automaker's next-generation vehicle production.
This comes days after Micron's similar agreement with General Motors NYSE:GM, as part of the chipmaker's ongoing investments to expand manufacturing in the United States for automotive customers, including its expansion of advanced DRAM production in Virginia.
DRAM, or dynamic random-access memory, is a critical component for servers that power cloud computing, databases and AI workloads.
DRAM prices have risen about 70% since December, according to a S&P Global Mobility report, amid high demand for memory chips owing to surging investments towards AI-powered data centers.
Memory chips have also become a crucial part of vehicle production with advanced driver aid systems and power-hungry infotainment systems, adding automakers to the competition for tightening supply for these chips.
"As vehicles become more intelligent and data-intensive, the importance of advanced memory and storage continues to grow, making collaboration and long-term supply increasingly important," said Sanjay Mehrotra, CEO of Micron Technology.
Micron's supply agreements with Ford and GM are among the 16 outlined by the chipmaker during its third quarter.