Micron Technology received $12.75 billion in cash deposits from customers in fiscal year 2026, almost all of which are planned to be returned between 2029 and 2031. According to the company's fiscal year 2026 annual report, these deposits come from multi-year strategic customer agreements, under which customers commit to purchasing a specified quantity of storage products during the contract period. If the minimum purchase commitment is met, Micron will return the deposit; if not, the company can retain all or part of the funds. These agreements employ a "take-or-pay" arrangement, and the binding purchase volume helps Micron secure long-term demand in advance and also guarantees production capacity for customers. It is worth noting that this funding is not a product prepayment or operating revenue, but rather customer deposits used to guarantee future production capacity, recorded as contract liabilities, and the related cash flows are classified as financing activities, not free cash flow. Micron also disclosed that some agreements include third-party bank letters of credit, and as of September 3, 2026, the total amount of letters of credit opened or committed to be opened reached $7 billion.
