Memory leader Micron Technology (MU) declared on the 16th that it has entered into long-term supply contracts with Qualcomm (QCOM), automotive audio maker Harman, and various other automotive supply chain participants.

The agreements focus on guaranteeing a consistent supply of memory and storage parts needed for AI vehicles, while also improving stability in pricing and capacity management.

Also Read: Cabinet Approves ISM 2.0 for Chip Industry

The list of partners for these agreements includes essential areas of automotive electronics. Along with Qualcomm and Harman, it comprises automotive parts suppliers Visteon, JOYNEXT, Japan's DENSO, Astemo, and South Korea's Hyundai Mobis.

Micron announced that these long-term contracts will assist its partners in ensuring supply and price consistency, aiding production planning and allowing investments in the research and development of upcoming advanced vehicle platforms.

Also Read: Udaan Bags $160 Million Funding, Simplifies Capital Structure

Qualcomm's CEO Cristiano Amon emphasized in the statement: "With vehicles turning more software-defined, car manufacturers require technology platforms that combine high-performance computing, connectivity, memory, and storage features." This assertion highlights the crucial role of memory in future vehicle designs.

In June this year, Micron CEO Sanjay Mehrotra disclosed that the firm had entered into 16 strategic customer agreements. He expects that aside from ongoing growth fueled by data centers, the incorporation of AI capabilities into smartphones, premium personal computers, automotive uses, and robotics will emerge as fresh sources of demand.

Micron is presently the sole chip maker in the US that manufactures High Bandwidth Memory (HBM), and its products can be combined with Nvidia (NVDA) AI processors. The strong demand for AI has caused a shortage in high-end memory supply, enabling Micron and its primary rivals, SK Hynix and Samsung Electronics, to increase their prices.

Micron's broadened partnership with the automotive supply chain is influenced by a fundamental change in the worldwide automotive memory market. As ADAS (Advanced Driver Assistance Systems), digital cockpits, and automotive computing platforms quickly advance, vehicles are increasingly dependent on high-performance memory and storage elements.

Also Read: IKEA India to Invest Over Rs 21,000 Crore by 2030

Industry experts highlight that the memory capacity setup in modern vehicles is increasingly resembling that of laptops and even desktop PCs. For example, the infotainment system on the Mercedes-Benz MB.OS platform needs 4 to 12GB of DRAM, whereas the cockpit computing system in BMW's latest iX3 electric SUV has been enhanced to 16 to 24GB. In high-end models, the total DRAM usage of a vehicle may reach around 70GB when incorporating an autonomous driving computer.

Mehrotra observed that cars with L2+ or greater autonomous driving features need over five times the memory and storage of a conventional vehicle. He predicts that the sales proportion of these smart vehicles will go beyond 20 percent in 2026 and exceed 40 percent by 2030.