[E-Daily Reporter SOYEON KIM ] U.S.-based Micron has signed long-term supply agreements for automotive memory with U.S. automakers such as Ford and General Motors (GM), positioning itself to secure a leading position in the future automotive electronics market. Amid a race among memory companies to make large-scale capital investments, Micron’s strategy is to secure stable customers and establish a defensive position. Analysts suggest this could pose a challenge for SamsungElectronics and SK hynix in terms of maintaining their dominance in the long-term automotive semiconductor supply chain.

According to industry sources on the 9th, Micron has signed a long-term supply agreement (SCA) for next-generation automotive semiconductors with Ford, following a similar deal with GM. This marks the full-scale launch of a “lock-in” strategy aimed at expanding its automotive semiconductor production facilities in the U.S. while securing key American automakers as allies.

Currently, Micron is expanding its production capacity in the automotive sector, including the expansion of state-of-the-art DRAM production facilities at its Manassas, Virginia, plant. Micron is building out its portfolio based on long-term contracts, with automotive memory serving as a core pillar. Since driving safety and reliability are top priorities for automotive semiconductors, once a supplier enters the supply chain, long-term business relationships typically last for more than 10 years. From Micron’s perspective, this amounts to securing “defensive customers” that are not swayed by market volatility.

In particular, as autonomous driving systems become more widespread and in-vehicle infotainment (IVI) systems become more sophisticated, demand for high-capacity, high-performance automotive semiconductors is surging, making market competition even more intense. Sanjay Mehrotra, Micron’s CEO, emphasized, “As cars become increasingly intelligent and data-intensive, the importance of advanced memory and storage continues to grow,” adding, “Consequently, close collaboration with semiconductor companies and the value of long-term supply have become more important than ever.”

In fact, while Micron had long held the top spot in the global automotive memory semiconductor market, it ceded the lead to SamsungElectronics for the first time ever last year. This was the result of SamsungElectronics capturing a significant portion of the supply chains for China’s high-growth electric vehicle and parts markets, led by its low-power DRAM (LPDDR) and Universal Flash Storage (UFS) products.

Micron plans to secure a long-term supply chain in its home market of North America through alliances with U.S. automakers. Amid escalating U.S.-China tensions, the company aims to establish a self-sufficient system of “production-supply-consumption” within the United States, backed by the full support of the U.S. government.

Given this situation, the barriers to entry into North America for SamsungElectronics and SK hynix are bound to rise. This means that as Micron expands its automotive memory portfolio, the burden of responding to the market in the future could increase. This also raises serious concerns regarding future strategies for diversifying supply chains within the U.S.

An industry official explained, “Low-power, high-performance DRAM is used not only in servers but also in automotive applications, and there is a trend toward signing long-term contracts.” The official added, “As Micron forms strategic partnerships with U.S. automakers to strengthen its domestic supply chain, this could place a burden on South Korean memory companies.”