July 1 (Reuters) - Micron Technology and General Motors have signed a long-term supply agreement for memory and storage platforms used in vehicle production, the companies said on Wednesday.
Under the agreement, GM will secure supplies of memory and storage chips, while the companies work together to develop future technologies.
Surging investments towards AI-powered data centers have boosted demand for memory chips, tightening supply and raising prices across industries, including automakers.
Since December, DRAM prices have risen faster than expected, up about 70%, according to a report from S&P Global Mobility. DRAM, or dynamic random-access memory, is a critical component for servers that power cloud computing, databases and AI workloads.
Memory chips have also become a crucial part of vehicle production with advanced driver aid systems and power-hungry infotainment systems.
According to GM, the agreement is a proactive move to safeguard critical parts of its supply chain rather than a response to any operational disruptions.
Micron said the agreement would be supported by its expanding U.S. manufacturing footprint, including its recently modernized memory chip plant in Virginia.
The chipmaker said GM's deal is one of 16 strategic customer agreements that it outlined during its third quarter.
(Reporting by Nathan Gomes and Kalea Hall; Editing by Devika Syamnath)
