Victor the Best

Micron took in $12.75 billion of customer deposits in its 2026 fiscal year, and nearly all of it is scheduled to go back to the buyers between 2029 and 2031. The money comes back when a customer meets its minimum purchase commitment. A customer that falls short may lose all or part of its deposit, which Micron would then book as revenue. At 3rd September the balance stood at $12.895 billion. At 28th May Micron's contract liabilities were $422 million, so nearly all of it arrived in one quarter. That gives buyers a reason to keep ordering. It does not make the deposits permanent capital for Micron's owners. The accounting is clean. Micron books the deposits under financing activities, so they did not inflate its operating cash flow. Microns annual report does not say whether repayment means cash or a credit against invoices. Some customers also keep bank letters of credit, $7 billion at 3 September, which Micron can draw only after specified defaults. More may be on the way. In June Micron said the agreements concluded to date carried about $18 billion of expected cash deposits. So it’s highly possible that Micron's non-current customer contract liabilities at the end of its December quarter come in above $12.895 billion. The gap between the $18 billion it expected and the $12.75 billion it had received is about $5 billion. This could be wrong if the balance Micron reports for 3rd December 2026 is $12.895 billion or less.

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